House prices rose by 0.9% in March, according to Nationwide. Annual growth to March was 2.2%, up from 1.0% in February. This is the highest level since the Budget, however this momentum will likely fade over the coming months as rising mortgage rates slow activity. The North West saw the strongest annual regional price growth (3.2%) while the South East saw price falls of -0.8%.

Activity is starting to slow after a strong start to 2026. Completed transactions in February were up 5% compared to 2017-19 levels and indicate growing momentum in early 2026. However, more timely data from TwentyCI showed that sales agreed net of fall throughs in March were down -2.5% on the 2017-19 average while RICS surveyors reported a drop in new buyer enquiries. Headwinds in the mortgage market are likely to further suppress activity over the coming months

Geopolitical uncertainty will drive inflation, but not to the same extent as 2022. Oxford Economics expects inflation to peak at 4% in Q4 2026 before falling sharply below 2% in 2027. The effects of this spike are likely be more muted than in 2022 when a combination of the global economy restarting after Covid, Russia’s invasion of Ukraine, and the mini-Budget caused a large and prolonged inflationary shock, and saw annual inflation reach a peak of 11.1% in October 2022. The current situation is one in which the UK and global economy is growing more slowly than 4 years ago, and the prospect of inflation increasing to the same level is less likely.

The Bank of England has adopted a ‘wait and see’ approach to further rate cuts or rises. The effects of this are already being felt with the Bank of England pausing rate cuts, and with the mortgage markets adopting a more cautious approach. Lenders have already raised rates by 1% from where they were in January, with 2- and 5- year fixes at 4.8% and 4.9%, respectively. The number of mortgage products available in the UK has fallen from 8,500 to 7,000 but this is a modest change when compared to 2022, when a quarter of all mortgage products were taken out of the market.

More localised house price data from December shows that the North East and Scotland had the greatest price growth, particularly East Renfrewshire (6.7%), Renfrewshire (6.4%) and Ribble Valley (6.4%). The weakest growth was in Tower Hamlets (-5.5%), Brent (-5.4%) and Hastings (-4.9%).

Annual rental growth across the UK in February was 2.0% according to Zoopla, up slightly from 1.9% in January. The North East and North West continue to see the strongest annual rental growth of 4.4% and 3.3%, respectively. The West Midlands saw the weakest annual growth of 0.6%.

The UK rental market continues to stabilise with a mixed regional picture. Rental growth in the North West has been driven by a combination of more affordable areas, such as Allerdale (16.7%) and Eden (13.1%), and urban markets, such as Liverpool (3.9%), seeing stronger rental growth. Urban markets in the Midlands have seen rental falls due to decreased demand; Birmingham (-1.5%), Nottingham (-2.0%), Milton Keynes (-0.7%) and Cambridge (-0.6%) have all seen falls.