UK average asking prices rose by 0.8% in April 2026 to a new high of £373,971, according to the latest Rightmove House Price Index — a smaller monthly rise than usual at this time of year and a clear sign that the Iran conflict is taking some of the heat out of the spring property market. The data, published this week, paints a picture of a market that is proving more resilient than many had feared in the weeks following the outbreak of conflict, but which is also showing signs of strain, particularly in London and the South East.
Mortgage rates have done the damage
The single biggest factor behind the slowdown has been the sharp rise in mortgage rates since late February 2026. The average two-year fixed mortgage rate climbed from 4.83% on 2 March to 5.83% on 22 April, with the average five-year fix rising from 4.95% to 5.70% over the same period. The moves followed a sharp jump in swap rates as bond markets repriced expectations for Bank of England policy. Where the MPC had been expected to deliver two further rate cuts during 2026, markets are now pricing in a hold-or-hike scenario, with some lenders having pulled their cheapest deals entirely in early April.
For first-time buyers and home movers refinancing this year, the practical impact is significant. On a 25-year £250,000 mortgage, the monthly cost at 5.42% is approximately £1,527, compared with around £1,442 at 4.83% — a difference of more than £1,000 a year. The pinch is being felt unevenly across the country: in lower-priced regional markets, the absolute increase is more manageable; in London and the Home Counties, where average mortgage sizes are far larger, the rate move translates into hundreds of pounds extra per month.
London is taking longer to sell
The Zoopla House Price Index, also published this week, highlights how the strain is concentrated in higher-priced southern markets. Across the UK, homes are taking just one day longer to sell than a year ago — a remarkable level of resilience given the broader uncertainty. But in London, homes are taking six days longer to find a buyer, with Harrow recording the sharpest deterioration: average time to sale has risen from 33 days a year ago to 54 days now, a 65% increase.
The pattern reflects two reinforcing factors. First, London buyers — and especially first-time buyers — are more sensitive to mortgage rate changes because of the size of the loans involved. Second, the stamp duty changes that came into force in April 2025 have hit London disproportionately hard: roughly four in five first-time buyers in London now pay stamp duty equivalent to around 3% of the purchase price, compared with fewer than one in ten outside the capital, where the average stamp duty bill is less than 1%.
Regional divergence widens
The corollary is a widening gap between the southern and northern halves of the country. Land Registry data for January 2026 (the most recent fully-revised figures) showed annual price growth of 4.3% in Scotland, with strong gains also in Northern Ireland, the North West and Yorkshire and the Humber. Prices in London, the South East and the South West were broadly flat or slightly down on the year. Agents in regional markets report that the lower absolute price points and smaller mortgage sizes are insulating buyers from the worst of the rate shock.
Forecasters had been predicting average UK house price growth of around 2% for 2026, with stronger performance in northern regions and weaker outturns in the South. The Iran-related shift in the rate outlook has not, so far, prompted major downward revisions to those forecasts — but most analysts now see the lower end of the previously-expected range as more probable, with downside risks if the conflict continues into the autumn.
What buyers and sellers are doing
Brokers report a noticeable shift in borrower behaviour, with rising demand for two-year fixed deals from borrowers hoping to refinance into a lower-rate environment in 2028, and increased interest in tracker mortgages that would benefit from any future Bank Rate cuts. Sellers, meanwhile, are being advised by agents to price realistically from the start — a contrast with the slightly more bullish pricing strategies common in early 2025. Estate agents currently report the highest level of homes-for-sale per agent in eight years, giving buyers more choice and more negotiating power than at any point since the post-pandemic boom.
— Edward Blackwell, London Capital Post
