Key Nationwide update for customers but it ‘could be derailed’ | Personal Finance | Finance
Experts warn that the market could be affected by world events (Image: Bloomberg via Getty Images)
Annual house prices across the country are reportedly rising by one percent, but experts warn that “the real estate market recovery could quickly be derailed by the Iran crisis.” House prices also increased by 0.3% monthly; The value of the average UK property has now risen from £270,873 to £273,176. previous monthAccording to Nationwide’s House Price Index.
But experts warned Donald TrumpAttacks on Iran, along with rising oil prices, risk destabilizing the housing market, potentially driving up inflation and pushing mortgage rates back up. This could also lead the Bank of England to delay lowering its base interest rate. experts warned.
Robert Gardner, Nationwide’s chief economist, said: “This reinforces the view of a modest recovery from the decline at the end of 2025 and is likely to reflect uncertainty around potential property tax changes ahead of the Budget.”
He added: “Looking at the full year 2025, total housing market transactions were 10% higher than in 2024. Increased affordability and easing in credit availability helped support first-time buyer activity, with mortgage completions increasing by 18% year-on-year.
“Home moves involving mortgages also picked up last year, with activity increasing by 15% year-on-year. There has also been a gradual increase in the number of buy-to-let purchases involving mortgages, but activity remains quite weak compared to historical levels, reflecting the ongoing headwinds affecting this part of the market.”
A nationwide update was given (Image: whitemay via Getty Images)
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Mr Gardner continued: “Cash transactions last year were at a similar level to 2024. In recent years, there has been a decline in the share of cash purchases, which accounted for 35 per cent of transactions, of 35 per cent in 2025, from a peak of 42 per cent in 2023.”
Babek İsmayıl, CEO of the home buying platform Single DomeHe warned that inflation could rise once again as a result of the Middle East crisis.
He added: “Although the budget had a sluggish performance in the fourth quarter last year, the only positive amid financial uncertainty was improvements in affordability. Lenders are doing all they can to help first-time buyers get on the ladder and this is starting to show as transaction levels rise. Mortgage rates have also fallen this year as lenders price in the possibility of further rate cuts, but events over the weekend in the Middle East could clearly lead to inflation and delay any cuts now. It’s a very fluid situation at the moment.” situation.”
Shaun Sturgess, director of the Swansea-based company Sturgess Mortgage SolutionsHe warned that a rise in inflation would push mortgage rates up once again.
He continued: “It’s been a strong start to 2026 so far, with mortgage rates falling as higher loan-to-value ratios and improvements in lender affordability lubricate property transactions. But following the weekend’s events and attacks on Iran, oil has suddenly become a operative word.”
Mortgage loan interest rates may be affected (Image: Yui Mok/PA Cable)
“It suggests that the recovery in the nationwide property market could be derailed quite quickly if oil prices continue to rise sharply. The Bank of England’s forecasts suggesting inflation will be around target in the not-too-distant future are now under threat, as is the possibility of an interest rate cut in the first half of the year.”
“There is every chance of a swap and, in turn, mortgage rates could start to rise again, which could dampen the momentum in growth. It’s going to be a very important week ahead.”
Andrew Montlake, CEO of the London-based company corecoHe suggested that the Bank of England might postpone the interest rate cut.
He continued: “Prices rose slightly in February, but this could reverse quite quickly after this weekend’s events in the Middle East. The impact on the UK economy could be profound. Domestically, further Bank of England rate cuts have been priced in this year, but this now looks much less likely as oil prices are already heading north and could potentially rise sharply.”
“It will likely be a blow for borrowers if swaps start to rise on Monday. The UK economy and property market, which are in desperate need of a rate cut or two, may now have to wait longer. We expect a turbulent week ahead.”
Emma Jones, managing director of the Runcorn-based company whenthebanksaysno.co.ukHe stated that brokers will monitor swap rates in the coming weeks. He added: “Prices rose in February, with affordability being the key driver, but a lot has changed in the first two days of March. Inflation is no longer guaranteed to fall if oil prices rise and that could jeopardize a Bank of England rate cut. Brokers will be watching how swap rates respond throughout Monday and there’s every chance mortgage rates could start to rise again.”
Justin Moy, managing director of the Chelmsford-based company EHF MortgagesHe noted that first-time buyers are entering the market at higher price points than before.
He added: “The House Price Index can mask a multitude of changes in the property sector, as these figures do not always reflect the full landscape. First-time buyers are ignoring rental properties and considering jumping halfway on the property ladder, while landlords are quietly snapping up these flats at discounted prices.”
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