UK house prices rise 0.9 percent in March growth spurt
UK house prices rose 0.9% in March to mark the strongest growth since late 2024. Analysts warn that rising energy costs from the Iran war cloud the outlook.
Residential property values in the United Kingdom experienced a significant surge in March, marking the strongest monthly growth since late 2024. According to data released by mortgage lender Nationwide, house prices climbed by 0.9% month-on-month, defying expectations of a cooling market amidst geopolitical tensions. This performance far exceeded the 0.1% decline predicted by economists in a Reuters poll and surpassed the 0.3% increase recorded in February. On an annual basis, prices rose by 2.2%, the highest rate since October and a notable jump from the 1.0% growth seen the previous month.
The resilience of the housing sector comes despite a backdrop of rising mortgage rates. Lenders have adjusted their pricing upward in response to concerns that the ongoing conflict involving Iran could trigger higher inflation and necessitate further increases in borrowing costs. Robert Gardner, the chief economist at Nationwide, noted that the market appeared to be recovering from a period of stagnation after the slowdown recorded around the turn of the year.
"The pickup in house price growth suggests that the market had regained momentum after the slowdown recorded around the turn of the year."
Despite the current momentum, the broader economic environment remains volatile. The escalation of conflict in the Middle East has led to a spike in global energy prices, which represents a significant shock to the global economy and clouds the outlook for future growth.
"However, the sharp rise in global energy prices in response to developments in the Middle East represents a significant shock to the global economy, clouding the outlook."
