Supported by heightened supply, steady decreases in mortgage rates, and rising buyer demand, the early 2026 perspective of the UK property market was positive. But circumspection arose following the ongoing situation in the Middle East, a crisis which has abruptly impacted interest rates, property prices, and consumer purchasing behaviour for the UK property market.
These effects have undoubtedly had negative consequences for the UK property market. Because of the long-term uncertainty surrounding the UK property market, some property analysts have encouraged consumers to act swiftly in securing property purchases.
Market Conditions
An immediate consequence of the Iran War is that mortgage lenders have raised interest rates. Within 48 hours of the outbreak of the Iran War, lenders from across the market withdrew hundreds of mortgage deals in favour of introducing higher interest rates. According to Moneyfacts, the average two-year fixed-rate mortgage stood at 5.90% in early April, up from 4.83% at the beginning of March. This is the highest rate since July 2024.
Rachel Springall, a finance expert at Moneyfacts, said that the unrest in the Middle East has caused ‘mortgage mayhem’, further commenting: ‘Unfortunately, this has led to a drop of almost 400 options for borrowers with just a 5% or 10% deposit or equity, awful news for first-time buyers. The market overall has experienced the worst upheaval to mortgage choice since the mini Budget’.
On the other hand, property prices across the UK have contracted over the past month, with Halifax observing that the average property price fell by 0.5% in March compared to the previous month. Assessed based on current conditions, Deutsche Bank projected that the average UK property price could fall between 3% and 5% by the end of the year.
A major part of this is the steep decline in buyer interest. A paradigmatic case is the situation in Canterbury, a city with less than 100,000 residents, where properties previously valued at £600,000 are now being listed at £575,000 to encourage buyer interest. According to Andy Wicking, the director of the Charles Bainbridge Estate Agents, the volume of homeowners who requested property valuations that led to listing their homes dropped from 68% in 2025 to 47% in 2026.
In one striking example, a seller noted that viewings for their converted Georgian pub in Bekesbourne ‘dropped through the floor’ following 28 February. In the three years since the pub was first put up for sale, the asking price has dropped from £750,000 to £525,000.
For these reasons, Wicking commented that the general mood sweeping prospective buyers is ‘fear and uncertainty’. ‘It’s very important to get the offer, get the deal done, [and] get it across the line quick’, Wicking observed, because the ‘longer a chain goes on, the more buyer’s remorse and fear sets in.’
Consumer Action
Michelle Niziol, the founder of IMS Property Group, has argued that there are still opportunities for prospective buyers to acquire property. ‘What we’re seeing now isn’t buyers disappearing,’ Niziol said, ‘it’s buyers pausing – the intent is still there, but people are taking longer to commit because of how quickly conditions have changed.’
‘The property market continues to reward people who plan properly and think long term,’ Niziol reaffirmed, but what has changed ‘is that decisions need to be grounded in today’s conditions, not a version of the market that may not come back in the same way. If the numbers work now and they work sustainably, there’s no good reason to wait.’
Even though Amanda Bryden, the head of mortgages at Halifax, has commented that the ‘recent increase in mortgage rates has been more modest than the sharp rises seen during the mini budget of 2022’, there is nevertheless widespread uncertainty at the moment, predicated on the highly volatile and quickly changing events happening on the international scene.
This uncertainty has caused buyers to be hesitant, opting to adopt the wait-and-see approach rather than taking the decisive step in acquiring property.
Yet Niziol has argued that the ‘perfect moment rarely arrives in the way people think it will.’ Rather, Niziol continued, ‘What matters more is whether the numbers work for you today and stay sustainable over time. Waiting can sometimes make things harder rather than easier, whether that’s through rising rents, higher deposits or more competition when things do improve.’
Exploring Options
According to the Building Societies Association, 47% of respondents looking to buy property have never consulted with a mortgage adviser or lender. Even among those who had, however, 46% have not had a conversion within the last year.
Shifting market circumstances will influence interest rates and property prices – the scale and speed at which these are expected to move are up for debate. Therefore, it is especially important now to consider all available options in determining whether to buy or wait.
