Buyer demand in the housing market has remained relatively stable despite the outbreak of conflict involving Iran, according to Rightmove. While global tensions have raised concerns, there has not yet been a noticeable drop in interest from those looking to purchase property.
Rightmove’s latest house price index, which covers the period from 8 February to 7 March, provides a snapshot of market activity during the early stages of unrest in the Middle East. During this time, average asking prices increased by £3,023, representing a 0.8 per cent rise and bringing the national average to £371,042.
This increase suggests that the property market was continuing its upward trend before the situation escalated further. However, the broader economic effects of the conflict are beginning to emerge, particularly in relation to borrowing costs.
Following the US-led strike on Iran on 28 February, tensions intensified across the region. Concerns about disruptions to oil and gas supplies quickly led to rising energy prices, which in turn have added to inflation worries. As a result, lenders have responded by increasing mortgage rates.
Despite these developments, the housing market was already facing challenges before the conflict began. Rightmove highlighted that conditions had been difficult for sellers, with a large number of properties available creating strong competition.
The supply of homes for sale is currently at its highest level for this time of year in over a decade. This has given buyers more choice and reduced the likelihood of significant price growth, as sellers must price competitively to attract interest.
Even with these pressures, the number of agreed sales has remained fairly resilient. Transactions are only 2 per cent lower than the same period last year, which was considered particularly strong, and are still running 5 per cent ahead of 2024 levels.
Buyer demand had already slowed compared to last year’s busier market, but importantly, it has not declined further since the conflict began. This indicates that, so far, geopolitical events have not significantly affected purchasing decisions.
Affordability continues to be a key factor influencing the market. Rightmove described the current environment as highly price-sensitive, with buyers carefully considering their budgets and borrowing capacity.
Regional differences are also becoming more apparent. More affordable areas such as the North of England, Scotland and Wales have recorded stronger price growth compared to the more expensive regions in southern England.
The North West, for example, has seen annual price growth of 2.6 per cent, while London has experienced a 2.1 per cent decline. This contrast highlights how affordability constraints are shaping demand across different parts of the country.
At the lower end of the market, smaller homes typically purchased by first-time buyers have seen a slight drop in value. Prices for these properties have fallen by an average of 0.4 per cent over the past year.
In contrast, mid-range homes aimed at second-time buyers have recorded modest growth of 0.6 per cent. Meanwhile, prices for larger, higher-end properties have remained largely unchanged.
Rightmove suggested that the slight fall in prices for entry-level homes could present an opportunity for buyers who already have a deposit saved. However, saving for that deposit remains difficult for many, particularly as rental costs remain close to record highs and general living expenses continue to rise.
Tomer Aboody of MT Finance pointed out that affordability remains a major barrier, particularly in the south of England. Higher property prices make it harder for buyers to meet deposit requirements and satisfy lenders’ income criteria.
Separate research from Savills shows that UK households spent a record £226 billion on housing costs in 2025. This figure includes spending on both rent and mortgage payments across private and social housing sectors.
Housing costs have increased by £8 billion over the past year, representing a 3.6 per cent rise. Over the past five years, costs have climbed by £66 billion, equivalent to a 41 per cent increase, although the pace of growth has slowed more recently.
Lucian Cook from Savills noted that higher mortgage costs have mainly affected homeowners coming to the end of fixed-rate deals. At the same time, rental growth has begun to return to more typical levels after a period of rapid increases.
Although the direct impact of the Middle East conflict on housing activity has been limited so far, mortgage rates are beginning to rise. Rightmove has highlighted increasing upward pressure as lenders respond to global uncertainty and inflation risks.
According to its data, the average two-year fixed mortgage rate rose to 4.51 per cent in the week starting 9 March, up from 4.24 per cent the previous week. Other data from Moneyfacts suggests rates are even higher, reaching around 5.10 per cent by mid-March.
This increase reflects how sensitive the mortgage market is to changes in inflation expectations and geopolitical developments. Even small shifts in outlook can quickly influence borrowing costs.
Lenders are also reacting to changing expectations around interest rates set by the Bank of England. While a rate cut had been expected, rising inflation risks linked to the conflict may lead to delays or even further increases.
Colleen Babcock of Rightmove said that housing market activity has remained stable so far in March, which is encouraging given the uncertainty. However, she cautioned that it is still too early to determine the longer-term impact.
She added that many buyers are likely keeping a close eye on mortgage rates and wider household costs when making decisions. Although average monthly mortgage payments have risen by around £45, they remain approximately £70 lower than at the same time last year.
Overall, the property market appears to be holding steady for now. However, with mortgage rates rising and economic uncertainty continuing, the coming months will be crucial in determining whether this resilience can be maintained.
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