Annual house price growth accelerated in March despite geopolitical uncertainty threatening to reverse recent affordability gains, according to the latest data from Nationwide.
Prices rose 2.2 percent year-on-year in March, up from 1 percent in February, with average values reaching £277,186. The monthly increase of 0.9 percent suggests the market had regained momentum after a slowdown around the turn of the year – before the Middle East conflict began to reshape economic expectations.
Regional divide widens as Northern Ireland outperforms
Northern Ireland continued its run as the UK’s strongest performer, with prices up 9.5 percent year-on-year in the first quarter. This was nearly three times the 3.3 percent recorded in the North West, the strongest English region.
At the other end of the spectrum, the Outer South East saw prices fall by 0.7 percent, while East Anglia recorded a 0.4 percent decline. London posted modest growth of 1.7 percent, up from 0.7 percent in the previous quarter.
Robert Gardner, chief economist at Nationwide, said the pickup in growth suggested the market had regained momentum. However, he warned that the sharp rise in global energy prices following developments in the Middle East represents a significant shock to the economy.
“In the near term, UK economic growth is likely to be slower and inflation higher than previously expected,” Gardner said. “The outlook for interest rates is particularly uncertain.”
Swap rate shift threatens affordability gains
Financial markets now expect three interest rate increases over the next twelve months, compared to two rate cuts being anticipated before the strikes on Iran. This has driven a sharp rise in swap rates that underpin fixed-rate mortgage pricing.
“If sustained, this could reverse some of the improvement in housing affordability that has taken place in recent years,” Gardner explained.
This follows Landlord Knowledge’s report on falling buyer enquiries, which found demand had dropped 13 percent as geopolitical tensions pushed up mortgage rates. The latest figures suggest price resilience may prove short-lived if borrowing costs remain elevated.
Flats continue to lag other property types
Detached properties saw the strongest growth at 2.4 percent year-on-year, followed by terraced homes at 2.1 percent. Semi-detached properties rose 1.5 percent.
Flats recorded a 0.5 percent annual decline – continuing a pattern of underperformance. Since 2020, flat prices have risen just 15 percent, half the 30 percent increase seen in detached houses. Nationwide attributed this partly to London’s weaker performance, given the capital’s higher proportion of flats.
Nathan Emerson, chief executive of Propertymark, welcomed the upturn but urged caution. “This upward movement 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.”
What this means for landlords
- If you’re holding property in Northern Ireland or the North West: Your equity position continues to strengthen – these regions are outperforming the national average significantly.
- Watch for: Rising swap rates affecting buy-to-let mortgage pricing. If you are refinancing in the coming months, higher rates may erode any capital gains.
- Flat owners take note: The ongoing underperformance of flats means portfolio rebalancing toward houses may be worth considering, particularly in London and the South East.
- Bottom line: March data shows resilience, but the outlook has darkened considerably – lock in any refinancing quickly before further rate increases.
Editor’s view
The numbers look encouraging in isolation, but the timing is unfortunate. Just as the market was finding its feet after a difficult 2025, geopolitical events have thrown projections into disarray. Landlords who were banking on cheaper refinancing this year now face a very different picture. The smart move is defensive – review your exposure, stress-test your margins against higher rates, and avoid overcommitting while swap markets remain volatile.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 31 March 2026
Sources: Nationwide Building Society, Propertymark
Related reading: House prices remain 7.6 times average earnings as affordability improves but landlords exit
