Spring is typically a time of year when there’s lots of activity in the housing market. But can we expect the same trend this year?
The conflict in the Middle East has caused uncertainty and it’s unclear how long that will last. But equally there’s anecdotal evidence that houses are still in high demand, especially in Bristol and the South West.
Let’s have a look at what we know at the moment, and how these issues might affect the housing market in the next three months.
Impact of the Iran war
Since the conflict began on 28 February 2026, inflation has been on the rise. This has had a knock-on impact on interest rates and mortgage rates.
Mortgages: fewer deals, higher rates
Mortgage lenders reacted quickly to the conflict, and reduced the number of deals they were offering. In fact, one in five recent mortgage deals that were on the market in February are now no longer available.
Rates have also risen, and the average two-year fixed-rate mortgage rose from 4.84% on 1 March 2026 to 5.51% on 25 March 2026.
It’s unclear how things will settle, but while the Straight of Hormuz remains effectively closed, inflation continues to rise. Oxford Economics has predicted a ‘worst-case’ scenario in which mortgage rates hit 6%.
This seems like gloomy news for buyers, who may have to reapply for a Mortgage in Principle if their deal is no longer available. This volatility could result in fewer property transactions happening over Spring than we’d usually expect.
Greater interest in self-sufficient energy solutions
However, people are becoming increasingly aware (and frustrated by) our exposure to fluctuating oil prices. With that in mind, some buyers are thinking about energy solutions much higher up on their list of priorities for a new home.
So houses with things like solar panels, air source heat pumps, and ground source heat pumps are becoming more attractive. Buyers recognise that this sort of technology can help to protect them from the volatility of oil prices.
More homes, more stable prices?
The Government is building more homes to reach its pledge of 1.5 million new homes by 2030. This should mean that supply catches up with demand and prices rise less steeply.
However, we haven’t necessarily seen the impact of this yet, particularly in the South West.
Anecdotally, we know that houses still go for over the asking price. Houses in popular areas of Bristol like Bedminster, St Annes, St George’s regularly have 15 or more viewings.
Changes to Stamp Duty?
Unfortunately, there are no signs that any changes to Stamp Duty will be put in place in the next three months.
It could be a longer term plan though, which could encourage more people to move home.
If changes are afoot, then that could stimulate the housing market into a flurry of activity again. We saw that house sales spiked back in March 2025 as people tried to complete their transactions before the changes to Stamp Duty took hold in 1 April 2025.
Overall summary
Given the current volatility in the Middle East, we expect buyers to be a little more cautious than in previous years. So, we’d expect fewer property transactions than we’re used to, while people wait to see how mortgage rates will settle and they reassess what they can afford.
That said, Spring is still a popular time to look for houses with a view to completing the transaction while the weather is good! In particular, Bristol’s housing market remains buoyant and there are still many buyers looking for suitable homes.
If you want to get a property sale or purchase underway, we’re happy to help and to answer your questions.