Housing market remains steady despite higher mortgage rates
- The housing market remains steady so far in April despite higher mortgage rates due to global uncertainty.
- Average new seller asking prices rise by 0.8% (+£2,929) in April to £373,971. This is consistent with February and March, but is below the long-term average for April.
- The average two‑year fixed rate has risen to 5.42%, from 4.25% before the start of the war in Iran, adding a monthly average of around £235 to a typical new mortgage.
The housing market has so far remained steady in 2026, despite mortgage rates rising fast in recent weeks due to the uncertainty caused by the war in Iran.
Buyer demand in April to date is 7% down compared to the same period in 2025. While demand is lower than last year, this trend was also seen in February and March, when demand was also 7% lower than the previous year.
The reason for this is that 2025 was a particularly strong market, as buyers were trying to complete their home purchases before stamp duty rose. This, plus the timing of the Easter holidays this year, makes it difficult to draw comparisons with activity in 2025.
It’s also still too early to understand how the war in Iran is affecting the market, but next month should give us more insights.
Is 2026 a good year to buy?
Despite market challenges, 2026 is still shaping up to be a good year to buy, for a number of reasons:
- Average earnings are still up by 3.9% annually, while asking prices for properties are down 0.9% year-on-year.
- A typical mover is also now able to borrow more, due to last year’s review of the Loan-To-Income cap and reminder to lenders about stress testing flexibility by the Financial Conduct Authority.
- Demand has so far proven most resilient among first-time buyers (-6%), suggesting higher mortgage rates are not putting off first-time buyers from enquiring, at least for now.
- The number of sales agreed for April to date so far this year is also staying steady, as we are currently just 3% behind this time last year.
What are mortgage rates doing?
Rightmove’s daily mortgage tracker shows that the average two‑year fixed rate has risen to 5.42%, from 4.25% before the start of the war in Iran. This adds an average of around £235 per month to a typical new mortgage.*
“Financial markets are now largely pricing in further Bank of England Base Rate increases this year rather than cuts,” explains Rightmove’s mortgages expert Matt Smith. “This has fed through into higher mortgage rates compared with earlier in 2026 and this time last year.
“The initial shock appears to have passed, with mortgage rates stabilising over the past couple of weeks, but they remain elevated. The next moves will depend on upcoming UK inflation data and how the Bank of England responds.”
The numbers at a glance
Prices up by 0.8% in April, a smaller than usual increase at this time of year
Number of agreed sales only 3% lower than this time last year
Average two-year fixed mortgage rate rises to 5.42% from 4.25% before Iran war
Colleen Babcock, property expert at Rightmove:
“With mortgage rates remaining elevated due to the war in Iran, it’s not a surprise that price growth is proving strongest in parts of the market less exposed to higher borrowing costs. Across Great Britain, Scotland stands out as an example of resilience, with average prices rising by over 4%.
“Lower average asking prices and a faster home-buying process continue to support price growth in the Scottish market. However, for most of the market, the combination of rising mortgage rates and the number of homes for sale being at its highest level for the time of year over a decade, means that competitive pricing is crucial for sellers looking to attract buyer interest and secure a sale this spring.
“Some buyers will be feeling cautious due to cost of living and mortgage rate increases. However, the latest data shows that, at least for now, home-movers are largely showing their usual resilience with their housing needs trumping other events. While higher mortgage rates negatively affect affordability, many buyers are also benefiting from rising wages, lower house prices and more flexible borrowing criteria than in recent years, which all help affordability.”
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