UK House Prices Rise 0.9% in March, Fastest in 18 Months

UK house prices rose at their fastest monthly pace in nearly 18 months in March, reaching an average of 277,186 pounds, according to data from Nationwide Building Society. The 0.9 percent month-on-month increase marked the strongest growth since December 2024 and exceeded economists' expectations of 0.6 percent. Annual price growth accelerated to 2.2 percent from 1.0 percent in February, signaling a rebound in market momentum after a sluggish start to the year.

The gains, however, come amid mounting pressures from the ongoing conflict in the Middle East, which began with U.S. and Israeli strikes on Iran on February 28. The war has driven up global energy prices, fueling inflation concerns and prompting financial markets to revise expectations for the Bank of England's monetary policy. Prior to the conflict, analysts anticipated two interest rate cuts this year from the current 3.75 percent base rate. Now, markets price in three rate hikes over the next 12 months, leading to a sharp increase in longer-term swap rates that influence fixed-rate mortgage pricing.

As a result, UK mortgage rates have surged. The average two-year fixed-rate mortgage climbed to 5.77 percent by late...