Summary
UK home buyers are increasingly nervous as mortgage rates climb due to the Middle East conflict, causing Britain's housing market to cool markedly. The Royal Institution of Chartered Surveyors (RICS) survey for March indicates that the net balance for new buyer demand fell to -28, while the gauge for house prices dropped to -23, with expectations for prices over the next three months plunging to -43?417463167522081†L194-L236?. Surveyors report a sharp decline in buyer inquiries and sales expectations as lenders pass on higher borrowing costs sparked by war-driven energy price shocks. Even though a two?week ceasefire briefly eased swap rates, mortgage rates remain elevated, dampening demand. The RICS survey suggests that the path forward depends on energy prices and inflation; a prolonged conflict could keep mortgage rates high and further cool the market?417463167522081†L194-L236?.
The report also notes that limited housing supply is pushing rents higher, with the measure of rental growth expectations at +39 as landlords reduce property listings?417463167522081†L194-L236?. Rising rents and borrowing costs are squeezing household budgets, intensifying concerns about affordability. While sellers have held off listing properties, they may be forced to accept lower offers if demand weakens further. Economists warn that the UK's housing market remains sensitive to geopolitical developments, and any escalation could trigger higher energy costs and interest rates, undermining both demand and prices. Buyers considering a home purchase in 2026 should budget carefully, lock in mortgage offers when rates are favourable, and consider longer fixed-rate terms to mitigate uncertainty. The RICS data underscores how closely the housing market is tied to global events and energy prices, making it more important than ever to stay informed.
#UKHousing #MortgageRates #RealEstate #Inflation #InterestRates #PersonalFinance