Selling or buying a home is stressful enough without global headlines moving the goalposts.
But that’s exactly what’s happening right now: the conflict involving Iran has pushed up energy-price expectations, which has fed into inflation worries and, in turn, higher mortgage rates.
So what’s the actual state of the UK housing market today? And what does it mean for you if you’re thinking about buying or selling?
The latest Royal Institution of Chartered Surveyors (RICS) March 2026 survey shows just how quickly conditions have shifted, with buyer demand, sales and short-term expectations all weakening.
The market has cooled and the numbers prove it
The clearest near-term signal is pricing.
Halifax reported that average UK house prices fell 0.5% in March, taking the average property price to £299,677, while annual growth eased to 0.8%. Reporting has linked the slowdown to uncertainty around the Middle East conflict, alongside wider economic uncertainty and shifting interest-rate expectations.
That matters because, in a market where affordability is already tight, even a small shift in borrowing costs can change what buyers can pay and how confident they feel about committing.
Why the Iran conflict is showing up in UK mortgage rates
The chain reaction is straightforward:
- The conflict has contributed to rising energy price expectations.
- Higher energy price expectations can lift inflation expectations.
- When inflation looks “stickier”, markets become less confident about interest-rate cuts.
- Lenders have increased fixed-rate mortgages as market pricing shifted.
The average two-year fixed mortgage rate rose from 4.83% at the start of March to 5.90%, the highest since July 2024. Hundreds of the cheapest mortgage deals disappeared in weeks, with a sharp pullback in available mortgage products due to energy-price uncertainty.
What RICS says is happening on the ground
The RICS UK Residential Market Survey (March 2026) reported:
- New buyer enquiries fell to a net balance of -39% (down from -29%), the weakest reading since August 2023.
- Agreed sales dropped to a net balance of -34% (from -13% in February).
- Short-term sales expectations fell to -33% (from -4%).
- 12-month sales expectations eased to -1%, which RICS said points to a “broadly flat” market rather than the modest recovery previously expected.
- House-price balance slipped to -23% (from -14%).
- In lettings, tenant demand rose to +10% while landlord listings stayed negative at -25%, with near-term rental expectations at +29%.
RICS linked the shift in sentiment to borrowing costs and geopolitical uncertainty. RICS suggests that rising borrowing costs and geopolitical uncertainty have knocked buyer confidence and sales activity, and that the path ahead depends heavily on whether energy and oil costs reverse.
What this means if you’re buying
If you’re a buyer, you’ll find that the market has lost momentum, and that can create opportunities — but only if you stay realistic about affordability.
1. Expect more price sensitivity
With buyer enquiries and agreed sales weakening (as stated by RICS), sellers in many areas may need to be sharper on pricing. That doesn’t mean “bargains everywhere” — but it does mean the best-priced homes are more likely to win, and over-optimistic asking prices may sit.
2. Get your mortgage position nailed down early
When rates move quickly and products are being pulled, the biggest risk is losing time. If you’re serious about buying:
- Speak to a broker early.
- Consider how long you want to fix for.
- Stress-test your budget for a higher rate than today.
3. Don’t ignore the rental backdrop
RICS indicators suggest rents are still under upward pressure due to a supply-demand mismatch. If you’re deciding between renting and buying, it’s worth comparing:
- your likely rent trajectory, and
- the total monthly cost of owning (mortgage, insurance, maintenance, etc).
What it means if you’re selling
If you’re selling, the key shift is that buyers are becoming more cautious — and more rate-sensitive.
1. Pricing matters more than ever
RICS’ weaker buyer-enquiry and sales readings are a warning sign: you may still achieve a strong price, but only if you’re aligned with what the market can actually support at today’s mortgage rates.
2. The “certainty” factor
In uncertain conditions, buyers and sellers both value certainty. Chains can wobble when affordability changes mid-process.
If you’re selling to fund your next move, ask yourself: Do you need maximum price, or maximum certainty? There’s no right answer — but being clear upfront helps you choose the right route.
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3. Be ready for longer decision cycles
Even motivated buyers may take longer to commit while they watch rates. This can mean:
- more negotiation,
- more emphasis on survey outcomes, and
- a higher premium on homes that are “move-in ready”.
The Key Takeaway
Right now, the UK housing market looks less like a rebound and more like a pause.
- Halifax data shows prices dipped in March and annual growth slowed.
- Mortgage rates have risen sharply compared with early March.
- RICS indicators point to weaker buyer demand, fewer agreed sales, and a flatter 12-month outlook.
If you’re buying, focus on affordability first and use the momentum to negotiate sensibly.
If you’re selling, price with the market (not last month’s headlines) and prioritise the kind of certainty that fits your next move.
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