Iran's Escalating Conflict to Hit Housing Market Hard

A recent surge in global tensions following the conflict in Iran is expected to have a negative impact on the housing market, with Nationwide predicting that the market will soften over the coming months. According to the lender, which conducted its own survey of consumers, the momentum regained by the market in March has been short-lived. Rising mortgage costs and increasing energy bills are set to erode consumer confidence, leading to a decrease in property inquiries and sales. Nationwide’s chief economist, Russell Galbraith, warned that the impact of rising mortgage rates will be particularly felt among first-time buyers, who will struggle to afford increased borrowing costs. He also noted that the growing uncertainty around global events is likely to make people more cautious when it comes to making large financial commitments. “The situation in Iran is causing concern and uncertainty for consumers, which could lead to a slowdown in the housing market,” Galbraith said. “We’re seeing a rise in mortgage rates, which will impact first-time buyers who are already facing significant challenges getting on the property ladder.” While Nationwide expects the market to soften in the coming months, it’s not predicting a complete collapse of activity. The lender is forecasting that house prices will continue to rise, albeit at a slower pace than previously anticipated. “Although we’re expecting the market to slow down, we don’t see any signs of a major downturn,” Galbraith said. “The housing market remains a stable and secure investment for those looking to buy a home or invest in property.”