UK house prices rose sharply in March but Iran war expected to cause slowdown
UK house prices increased at the fastest rate in almost 18 months in March, although surging mortgage rates amid the Iran war are likely to lead to a market slowdown, according to Nationwide.The UK’s biggest building society said the price of a typical UK home increased by 0.9% month on month in March, the largest increase since December 2024.The increase, which compares with a 0.3% rise recorded in February and is ahead of economists’ expectations of 0.
6% growth, means the average price of a UK home now stands at £277,186.Annual house price growth picked up to 2.2% in March, from 1% in February.However, Nationwide warned that the US-Israel war on Iran had “clouded the outlook”, with financial markets expecting the Bank of England’s monetary policy committee to raise the base rate three times over the next 12 months from 3.75%.
Prior to the start of the conflict in the Middle East, analysts were expecting two rate cuts this year,“This shift has resulted in a sharp rise in longer-term interest rates [swap rates] that underpin fixed-rate mortgage pricing,” said Robert Gardner, the chief economist at Nationwide,“With consumer sentiment also likely to be dented by the uncertain outlook and the prospect of rising energy costs, housing market activity is likely to soften,”Average mortgage rates have risen above 5% in recent weeks as lenders have pulled hundreds of deals in the biggest upheaval since the aftermath of the 2022 mini-budget,On Monday, the average two-year fixed-rate mortgage hit 5.
77%, up from 4,83% at the start of March and the highest level since August 2024, according to Moneyfacts,A five-year fixed-rate mortgage has risen from 4,95% at the start of the month to 5,7%, the highest level since November 2023.
Karen Noye, a mortgage expert at Quilter, said: “Expectations of easing borrowing costs and gradually improving affordability had been supporting activity at the start of the year, but any real progress has been rapidly undone in the last month.“Since the start of the conflict, mortgage rates have risen sharply and lenders have been withdrawing products or repricing fixed-rate deals at short notice.For prospective homebuyers and movers, this has meant a rapid deterioration in affordability.”Northern Ireland continues to show the strongest growth in house prices across the UK, up by 9.5% year on year in the first quarter to £225,269.
The next fastest rate of house price growth is in the north-west of England, up 3,3% to £229,173, followed by Scotland, up 3% to £191,747,Two of the 13 regions covered in Nationwide’s quarterly report on prices across the UK had year-on-year declines,The weakest was the outer south-east of England – defined by Nationwide as covering towns and regions including Canterbury, the New Forest, Portsmouth and Winchester – which recorded a 0,7% year-on-year fall in the first quarter to £336,036.
This was followed by East Anglia where the average price fell by 0,4% to £273,237,House prices across the east and West Midlands, and the south-west, all rose less than 1% in value across the same period,Amy Reynolds, the head of sales at the Richmond estate agency Antony Roberts, said: “The property market continues to demonstrate resilience despite a backdrop of global uncertainty,The Middle East conflict has contributed to increased caution across financial markets.
Mortgage rates have already edged upwards in response, and this is naturally becoming a talking point among applicants.“We are seeing a slight softening in viewing numbers as some buyers pause to assess the situation.”
Nigel Farage to snub US conservative conference brought to UK by Liz Truss
Nigel Farage will snub a major conference of US conservatives that is being brought to the UK by Liz Truss.The short-lived former prime minister, who was accused of crashing the economy, was chosen by the Conservative Political Action Conference (CPAC) to lead a version of the event in the UK in July.She announced this on stage in Texas on Monday while next to Matt Schlapp, commentator and chair of the event, which in the US has hosted major figures including Donald Trump, Ron DeSantis, Tulsi Gabbard and Hungary’s Viktor Orbán.However, mainstream conservative figures in the UK seem wary to be associated with the Truss-led event.“We will be steering well clear of it,” a Reform UK source said, dashing any hopes that Farage would attend
Zack Polanski meets unions in attempt to get them to switch party funding to Greens
Zack Polanski has kicked off a charm offensive designed to convince trade unions to stop funding Labour and throw their weight behind the Green party, as he delivered the first in a series of speeches to union conferences.The Green leader has had “good conversations” with 10 trade unions, including some affiliated to Labour, according to party sources, and is due to address the University and College Union and the Bakers, Food and Allied Workers Union, not affiliated with Labour, in the coming months.The UK’s largest unions – Unite and Unison – were among those that denied negotiating with Polanski and said they remained affiliated to the Labour party. However, Unite is holding internal discussions about its future relationship with Labour before a special conference in 2027 at which it could potentially decide to disaffiliate.While Green party sources admitted that discussions Polanski had held with individual unions varied in formality, some union insiders were adamant that supporting the Greens would be a no-go area, and that such discussions were “much ado about nothing”
Kemi the attention seeker somehow always makes two plus two equal five | John Crace
Losing sleep over the war in Iran? Worried sick about the cost of living? Can’t pay your energy bills? Then relax. Because Kemi Badenoch has a displacement activity for you.It’s becoming increasingly easy to understand the Conservative leader by viewing her as a hyperactive five-year-old at the back of the class who is constantly disruptive. Who can’t get through a lesson without some kind of attention-seeking behaviour. Who has a constant desire to be indulged even though her first reactions are invariably wrong
Zack Polanski tells NEU teachers’ union that Greens would abolish ‘toxic’ Ofsted – as it happened
The Green party would abolish Ofsted because they view it as a “failed institution”, Zack Polanski, its leader, has told a teaching union conference.Polanski also said that the Greens were opposed to the academisation of schools and that they believe that Labour is not fixing the “failings” in the system by the Tories, but embedding them.In a speech to the National Education Union’s annual conference, Polanski said:double quotation markOfsted is a toxic, failed institution which is harming teachers and children – and it’s time to end it.Talking about school structures more generally, he said:double quotation markThis government’s reforms are simply tinkering around the edges.We need to end the Ofsted era entirely and move towards a genuinely collaborative model
Starmer pledges to tackle new cost of living crisis at May elections campaign launch
The 7 May elections are taking place against a backdrop of “war on two fronts”, Keir Starmer has said, as he pledged action to tackle the resurgent cost of living crisis.Launching Labour’s English local elections campaign in Wolverhampton on Monday, the prime minister said: “We’re facing a war on two fronts – the Ukraine war, now four and a bit years in … and now the Iran war, which I know is causing huge concern.“People look at their screens and they’re worried when they see explosions, infrastructure blown up, the rhetoric that goes with it, worried about whether this is going to escalate even further.”Labour is braced for heavy losses in English council votes on 7 May, in particular in the north-east and London, amid challenges from Reform UK on the right and the Green party on the left. The contests are seen as a major test for Starmer’s premiership
MPs wary of move against Starmer while war is raging
A week after Labour’s election victory in July 2024, officials at Labour HQ held their first crisis meeting about the May 2026 local elections.The party had just secured a 174-seat majority and already strategists were predicting it would be very tough, though none were assuming the prime minister’s own position would be vulnerable.Now, according to multiple officials, it will be nothing short of a “bloodbath” – though it is an open question whether the parliamentary Labour party will use it to depose Keir Starmer.One Starmer ally said it would be impossible to spin the results. “There’s no point us doing expectation management, as the results are going to be terrible anyway,” they said
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