Housing market shows resilience despite ongoing economic and geopolitical uncertainty

The housing market remains resilient, even as geopolitical tensions continue for longer than many anticipated, committed buyers and sellers are still pressing ahead, helping demand remain firm despite higher borrowing costs and broader economic uncertainty.

Interest rates

At its April meeting, the Bank of England voted to hold interest rates at 3.75%, with markets currently pricing in a single rate hike during 2026. The decision came as headline inflation rose to 3.3% in March, driven largely by higher energy costs. However, underlying inflation came in lower than expected at 3.1%, strengthening the Bank of England’s position to keep rates steady in the near term.

Although buyer sentiment has softened slightly, demand remains comparatively robust. Buyer enquiries are currently running 2% below the same period last year, although activity has strengthened since Easter and is now at its highest level since late February.

Mortgage approvals rising

Mortgage approvals rose to 63,531 in March, their highest level in four months, and just 0.8% below the same time last year. At the same time, movers are adopting a more measured approach as they assess pricing expectations and wider economic conditions.

In March, the average time taken to sell a property fell to 32 days, down from 39 days in February and lower than the 36 days recorded a year earlier. This points to continued momentum among needs-based movers who remain committed to transacting despite ongoing market uncertainty.

Understanding local dynamics is key

Regional trends continue to vary with higher-priced areas generally moving more slowly, while more affordable regions are seeing homes change hands more quickly. As price sensitivity becomes increasingly clear, understanding local market dynamics and setting a realistic asking price is becoming more important than ever in achieving a timely sale.

While economic and geopolitical tensions continue to influence the market, we are still seeing motivated buyers and sellers pushing ahead with their plans. The market is undoubtedly more price-sensitive, but well-presented and correctly priced homes are continuing to attract strong interest.  

Buyers are taking more time to make decisions and are being increasingly selective, which makes accurate pricing and local expertise more important than ever. Encouragingly, transaction levels remain steady, and many movers are adapting well to the current mortgage environment.

Adjustments to mortgage affordability

Despite higher borrowing costs, recent adjustments to mortgage affordability rules mean many borrowers are now able to access larger loans, helping to support continued market activity. Mortgage rates have risen since the onset of the conflict, reaching 4.4% at the end of March compared to 4.0% in February, although pricing has grown more competitive since.

Approximately 1.8 million households are expected to see their fixed-rate mortgage deals expire during 2026. A significant proportion of these homeowners secured five-year fixed deals during the historically low-rate environment of 2021, leading to understandable concerns around higher future repayments.

Reassuring signs for borrowers

However, there are signs of reassurance for many borrowers. Under current lending conditions, an estimated 94% of homeowners are still expected to be able to refinance below the stress test rate applied to their existing mortgage.

Average UK house prices reached £267,957 in February, representing annual growth of 1.2%. This suggests that the market has regained some momentum following a slower start to the year.

While modest price growth is expected to continue, forecasts have been revised lower in response to current climate. Full-year house price growth for 2026 is now forecast at 1.6%, compared with the 2.3% projection issued in March. Rising supply, now at an 11-year high, is giving buyers more choice and making this an increasingly price-driven market.

Despite ongoing uncertainty, needs-based movers continue to underpin market stability. Transactions rose by 1% in March to 104,070, up from 102,750 in February. While figures are 41% lower than the same period last year, this is largely due to the exceptionally high transaction levels seen in March 2025 ahead of stamp duty threshold changes introduced in April 2025.

Ultimately, the fact that buyer commitment has remained resilient across much of the country is a quietly reassuring signal in a market shaped by geopolitical uncertainty and elevated mortgage rates.

Take a look at the full Property Market Reports for Wales or the West Midlands.

For more information, or to book a market appraisal for your property, contact your local MMP branch.