UK House Prices Fall Amid Uncertainty Over Middle East Conflict 

Average UK house prices fell 0.5% in March amid growing concerns about the impact of the conflict in the Middle East, according to new data from Halifax.

The average property price slid -0.5% to £299,677. The pace of annual growth has also slowed to 0.8%, down from 1.2% the previous month.

It follows a slight rebound to the property market in February when house price growth rose 0.3%.

Why have house prices fallen?

Widespread concerns about the conflict in the Middle East have influenced demand for properties in the UK.

The market anticipates higher energy costs, which could lead to increased inflation. Analysts at CornWall Insight predict that the conflict could increase household energy bills by £322 per year from July.

As a result, interest rates might not fall as fast as previously forecast and could lead to a rise in mortgage rates instead.

What does this mean for the property market?

Sellers could face longer wait times to find buyers at their asking price. Some sellers might also hang on to their properties for longer in the hopes that the value will go up again, leading to stagnation in the market.

Falling house prices could help buyers find better value when looking for a home. This could be particularly beneficial for first-time buyers trying to get onto the property ladder.

However, swap rates, which indicate the direction of mortgage rates, have risen sharply. And many lenders have already increased the rates on fixed-term deals. This could add to housing affordability pressure for buyers across the board.

If you’re looking to buy a home within the next 5 years, using a top-rate savings account or Cash ISA could help boost your pot for homebuying costs.

Those with a longer time horizon, of 5 years or more, could use a Stocks and Shares ISA to help you build up a pot to cover a house deposit and homebuying costs.

Another product to consider is a Lifetime ISA, if you’re a first-time buyer, depending on the value of the home you’re looking to purchase.

For more tips, check out our podcast episode: The Truth About Buying a Home.