The housing market has so far remained surprisingly resilient, despite mortgage rates rising fast in recent weeks due to the uncertainty caused by the war in Iran, according to Rightmove’s latest Housing Price Index.
Their latest real-time snapshot of daily market activity shows that buyer demand in April to date, measured by enquiries to estate agents about homes for sale, is 7% down compared to the same period in 2025.
While demand is lower than last year, this is a continuation of the trend, with March and February also 7% lower in demand for the same period last year, which was a particularly strong market as buyers tried to complete purchases before stamp duty rose.
Additionally, the last seven days have shown some early positive signs of new buyer demand accelerating beyond last year.
While the unexpected headwinds of mortgage rate rises slowed the brisk start to 2026, there are tailwinds keeping the market moving. Although yearly wage growth has eased, average earnings are still up 3.9% annually, outpacing asking prices which are down 0.9% year-on-year.
A typical mover is also now able to borrow more, due to last year’s review of the Loan-To-Income cap and reminder to lenders about stress testing flexibility by the Financial Conduct Authority. Despite rate rises usually weighing most heavily on more mortgage-dependant first-time buyers, demand has so far proven most resilient in this group (-6%). This suggests higher mortgage rates are not putting off many new potential first-time buyers from enquiring at least for now.
The number of sales agreed for April to date so far this year is also showing resilience – currently just 3% behind this time last year. Additionally, homes newly coming to market is only 1% behind last year, and 13% higher than in 2024, showing that many new sellers are not deterred.
What’s happening with mortgage rates?
Rightmove’s daily mortgage tracker shows the average two‑year fixed rate has risen to 5.42%, from 4.25% before the start of the war in Iran, adding an average of around £235 per month to a typical new mortgage.
Colleen Babcock, property expert at Rightmove, said: “Some buyers will be feeling cautious due to cost of living and mortgage rate increases. However, the latest data shows that, at least for now, home-movers are largely showing their usual resilience with their housing needs trumping other events.
“While higher mortgage rates negatively affect affordability, many buyers are also benefiting from rising wages, lower house prices and more flexible borrowing criteria than in recent years, which all help affordability.”
Matt Smith, Rightmove’s mortgage expert added: “At the start of the year there was growing optimism that Base Rate would continue to fall, but that picture has shifted following the conflict in Iran.
“Financial markets are now largely pricing in further Bank of England Base Rate increases this year rather than cuts, which has fed through into higher mortgage rates compared with earlier in 2026 and this time last year.
“The initial shock appears to have passed, with mortgage rates stabilising over the past couple of weeks, but they remain elevated.
“The next moves will depend on upcoming UK inflation data and how the Bank of England responds. If policy decisions align with current market expectations, a period of relative stability is more likely than meaningful falls.
“Even if external pressures ease, including improved conditions in the Middle East, history suggests mortgage rates are unlikely to come down quickly.”
