How is the Middle East Conflict Impacting the UK Housing Market?
Even though Iran is thousands of miles away, the Middle East conflict is still having an impact on UK shores.
Prices have jumped at the petrol pump, and food inflation is on the rise.
But what about the housing market? How is it faring? And if you have plans to buy or sell, what should your next move be?
The housing market in 2026
To set the context, the property sector got off to a good start in 2026. Growth was steady and further interest rate cuts seemed likely.
But, as the Nationwide building society explained, the conflict that started on February 29 “clouded the outlook”.
So what comes next? With international politics so unpredictable, it’s impossible to be definitive (we’re estate agents, not fortune tellers). But here are some of the issues to consider.
What has changed
Mortgage rates
Despite the Bank of England holding the base rate steady at its March 19 meeting, lenders have repriced some products and pulled others from the market.
As a result, some buyers have had to revise their budgets and seek a new mortgage-in-principle.
The bank’s Monetary Policy Committee will meet again on April 30 to discuss rates, but any further cuts are unlikely for the time being.
Household bills
The cost of living remains a pressing issue, meaning many of us, including those looking to buy property, are watching the pennies and pounds closely.
What hasn’t changed
Housing supply
The UK’s chronic undersupply of housing shows no sign of abating. A lot is going on in the world, but people still need to live somewhere. This is why, despite some experts reporting a slight softening in the housing market, demand is holding pretty firm.
The circle of life
The domestic reasons that influence why people move haven’t changed either. People are still switching jobs, having babies and moving in and out of relationships. And, of course, properties are still coming to the market after someone passes away.
What could change
If the conflict continues long-term, the expats who fled places such as Dubai in March may opt to stay in the UK permanently. Even if the conflict draws to a close relatively soon, some may feel uncomfortable about returning to the region. This could generate increased demand for UK property.
Investment
Property is often seen as a safe-haven investment because of its resilient performance over the years. Wealthy people moving capital out of the Middle East may invest it in UK property.
Considerations for sellers
- Price setting is more important than ever. With some buyers feeling cautious following the rise in mortgage rates, sellers need to understand local market conditions.
- Ensure all basic DIY and maintenance tasks are up to date to give price-sensitive buyers a sense of certainty. They’ll be put off a property if they think they may find all sorts of hidden issues once they move in.
Considerations for buyers
- With some people opting to delay their move, you may find you have more choice and less competition from other buyers.
- Sellers will look favourably on those who are committed to movinh.
If you’d like more advice about the current housing market, get in touch with us today. We can help you with your next move.