Halifax: Amid the conflict in the Middle East, home prices drop by 05%

According to Halifax, property values fell between February and March as the US-Iran war's aftereffects began to affect the housing market

As the US-Iran conflict's aftermath affected the housing market, UK real estate prices dropped by 0.5 percent in March.

The most recent data from Halifax shows that the average house price decreased from 301,151 in February to 299,677 in March.

The lender attributed the downturn to the Middle East conflict, which has caused mortgage rates to rise due to concerns that inflation may pick up speed in the upcoming months.

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Start your trial: "The recent slowdown in the housing market reflects the wide uncertainty regarding the conflict in the Middle East," stated Halifax's head of mortgages, Amanda Bryden.

The market's initial momentum at the beginning of the year has been dampened by worries about rising energy prices, which have raised inflation expectations and raised mortgage rates. This has decreased confidence that interest rates will be lowered this year. The "

As the market began to slow, the annual rate of increase in home prices also decreased from 1.2 percent in February to 0.8 percent last month.

In the UK, certain areas suffered more than others. In the South East, where average values are higher, average home prices decreased by 1.9 percent per year to 383,573 in March. Prices fell to 536,751 in London, a 1.2 percent decrease.

In England's northern regions, where property values are lower, there is still significant growth in house prices.

In March, the average home price in the North West increased by 3.1 percent to 247,442, while in the North East it increased by 5 percent year over year to 184,119.

In the UK, house prices are still rising at the fastest rate in Northern Ireland. They increased by 8.7 percent to 224,809 in the year ending March 2026.

Wales and Scotland both saw strong yearly growth, with average prices rising by 1.6% and 4.4%, respectively. In Scotland and Wales, the average home value is 222,716 and 230,909, respectively.

Halifax is the source.

What is going to happen with mortgage rates?

Experts say that the most recent monthly data from Halifax is one of the first indications that the Middle East conflict is slowing the growth of UK home prices.

"March is the first full month in which the conflict in Iran fed through into UK mortgage pricing, making this data set an important early test of how higher borrowing costs are starting to affect the housing market," stated Karen Noye, a mortgage expert at wealth management company Quilter. The "

On Tuesday, April 7, the US and Iran agreed to a two-week conditional ceasefire, which caused stocks to rise and oil prices to fall.

However, the effective closure of the Strait of Hormuz off the coast of Iran since the war began in February, which caused the prices of gas, oil, and fertilizer to soar, is still expected to have an impact on the housing market in the upcoming months.

Easing tensions in the Middle East would reduce expectations for future interest rate increases, removing "immediate upward pressure off mortgage rates," according to Adam French, head of consumer finance at data firm Moneyfactscompare.

He did add that mortgage rates "are likely to remain higher for some time yet."

"Many lenders may be wary of making any abrupt moves due to the conflict's volatility, which can quickly move markets.

"The mortgage market will stabilize and rates may even start to decline the longer the ceasefire lasts and the markets remain calm. However, for the time being, it is more likely to cause increases to slow down or stop than to cause any abrupt drops. A "