Housing activity ‘likely to soften’ in coming months despite uplift in Q1 2026
UK annual house price growth picked up to 2.2% in March 2026 from 1% in February, according to Nationwide’s latest report.
The average price of a home now stands at £277,186, up from £273,176 last month following a 0.9% month-on-month increase.
Robert Gardner, Nationwide’s chief economist, said the lift “suggests that the market had regained momentum after the slowdown recorded around the turn of the year” but warned that the “sharp” rise in global energy prices in response to the ongoing conflict in the Middle East “represents a significant shock to the global economy, clouding the outlook.”
He added that housing market activity is “likely to soften” in the coming months with consumer sentiment affected by the economic uncertainty and the prospect of rising energy costs.
Jason Tebb, president of property website OnTheMarket, said: “While interest rate rises, rather than previously expected reductions, seem increasingly likely depending on inflationary pressures, six interest rate cuts in the past 20 months have greatly assisted affordability and put borrowers in a stronger position.”
He added that movers are “pressing on despite the Middle East conflict” and that buyers and sellers are “adopting a more pragmatic outlook rather than a loss of confidence.”
Northern Ireland had the highest rate of growth in Q1 2026, with house prices up 9.5% year-on-year, while the outer South East was the weakest performing region with prices down 0.1% compared with Q1 2025.
Nathan Emerson, chief executive of membership body Propertymark, warned that the increase in house prices “must be viewed in context.”
He said: “Affordability remains stretched by historical standards, and any renewed pressure on inflation that may also affect base rate decisions could quickly temper this momentum.”
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