Thursday 26 March 2026 | Your weekly briefing on the UK property market

Three weeks ago, markets were pricing two Bank of England rate cuts in 2026. Mortgage rates were edging down. A 4% fix looked possible by summer.

This week, the same markets are pricing the possibility of four rate hikes by the end of the year.

That is not a typo. Four hikes. Up not down.

The shift has been triggered by the ongoing Middle East conflict and its impact on energy markets. UK wholesale gas prices have surged. Oil has been trading above $100 per barrel. The 10-year gilt yield, which had been drifting back toward 4.35% just a month ago, spiked to 5.096% on Monday its highest level since the 2008 global financial crisis. It has since pulled back slightly to around 4.8% as some hope of de-escalation emerged, but the damage to the mortgage market has already been done.

AJ Bell's investment director described the situation plainly: the market is now saying that the outlook for UK interest rates has "radically changed."

What lenders are doing right now

The repricing has been swift and brutal. Coventry Building Society one of the UK's largest mortgage lenders pulled its entire residential and buy-to-let product range for new customers. Aldermore, Metro Bank, Gen H, TSB, Nottingham Building Society, Leeds Building Society, Shawbrook, and Principality have all either raised rates, withdrawn products, or repriced significant parts of their ranges. More are expected to follow.

The 2-year SONIA swap rate the key wholesale funding benchmark lenders use to price fixed mortgages rose to 4.483% this week. The 5-year equivalent sits at 4.346%. Those numbers feed directly into the fixed rates you see on the high street within days.

The interest rate hike scenario

This is not yet the base case but it is now a scenario that markets are actively pricing. If oil prices remain elevated and inflation re-accelerates, the Bank of England may judge that it cannot cut rates at all in 2026, and may even need to raise them. Governor Andrew Bailey has previously stressed that the Bank's approach would be "gradual and cautious" but that guidance was issued before oil hit $100 and the gilt market lurched toward levels not seen since the financial crisis.

The next MPC meeting is 30 April. Between now and then, February retail sales data, March PMI figures, and consumer confidence numbers will all shape the picture. If those readings show inflation pressure building, the case for hikes strengthens further.

What you should do

If you have a mortgage deal expiring in the next six months, the message this week is the same as it was last week but more urgent. Lock in a rate now. Mortgage offers last 3–6 months. If rates fall before you complete, most lenders will let you switch. If rates rise further and this week's data suggests they very well might you will be protected.

If you are currently on your lender's Standard Variable Rate, note that the average SVR is now approaching 8%. That is not a typo either. Act immediately.

Private Credit: The Escalation This Week

Since we first covered the Market Financial Solutions collapse in Edition 2, the private credit story has developed significantly and the numbers are getting harder to ignore.

Defaults among alternative lenders to UK commercial real estate have now climbed past 20% this year, up from the mid-teens at the end of last year. That is not a small move. Commercial real estate lending is the direct pipeline that funds property development, bridging loans, and value-add deals the same capital that SME developers rely on to build the homes the UK desperately needs.

The broader private credit market is under simultaneous pressure from rising gilt yields. When the 10-year gilt hits 5%, the cost of capital for private credit funds rises sharply. Refinancing becomes more expensive. Underwriting assumptions made when rates were lower start to look optimistic. Loans that were viable at 4% gilt yields are under pressure at 5%.

The IMF has now explicitly warned that risks from non-bank financial institutions if they materialise may spill over into traditional banks. Jeffrey Gundlach of DoubleLine Capital, one of the world's most respected fixed income investors, has been blunter still, describing private credit as "the top candidate to start the next financial crisis." Neither is saying a crisis is inevitable. Both are saying the risks are being underpriced.

Analysts are warning that rather than a sudden 2008-style crash, the more likely scenario is a "slow-bleed" a protracted credit squeeze that stifles development and business investment for years. For UK housing supply, that is arguably worse. A sudden shock is visible and forces a policy response. A slow tightening of development finance goes largely unnoticed until the pipeline of new homes simply stops arriving.

The Bank of England's Deputy Governor Sarah Breeden spoke at the Private Credit Connect London conference this month, examining market conditions and the tools available to maintain confidence in private credit. The BoE's system-wide stress test involving Blackstone, Apollo, KKR and other major players is ongoing, with results expected later this year. Until those results are published, the honest answer remains what the House of Lords said in January: there are too many "unknown unknowns."

We will continue tracking this story every edition.

This week a related, slower-moving crisis is also coming into sharper focus: the mass exit of small landlords from the UK rental market, and the structural change it is creating.

In 2025, an estimated 93,000 landlords left the private rented sector. In 2026, research from Savills and others suggests a further 110,000 could follow. Together, that would represent the largest two-year exodus from the rental market in modern UK history. The research also estimates that £48 billion was wiped from the value of private rented sector (PRS) properties in 2025 as small landlords sold up or stopped replacing tenancies.

Why are they leaving?

The squeeze has come from multiple directions at once. Section 24 mortgage interest relief restrictions phased in since 2017 continue to erode profitability for higher-rate taxpayers. The Autumn 2025 Budget added a further 2% surcharge on property rental income. The Renters' Rights Act, coming into force on 1 May 2026, abolishes Section 21 "no fault" evictions, fundamentally changing the power balance between landlord and tenant. And now mortgage rates are rising again, hitting those with buy-to-let borrowing particularly hard.

Many smaller landlords who bought in the 2010s using cheap debt are finding the numbers simply no longer work.

Who is filling the gap?

Institutional investors and corporate landlords Build to Rent (BTR) operators are stepping in. Over £35 billion has been invested in the BTR sector to date. Limited company buy-to-let purchases reached a record 43% of all BTL mortgages in 2025. The sector is consolidating rapidly.

This matters for renters because institutional landlords operate differently. The stock is generally newer and better managed, but rents are set at market rate with little flexibility. The informal negotiation that sometimes existed with a small private landlord disappears.

The supply problem

Here is the critical issue: when small landlords sell, the properties they vacate often leave the rental market entirely sold to owner-occupiers rather than replaced by new rental stock. Supply is tightening even as the number of renters in absolute terms remains high. Rental supply nationally remains 23% below pre-pandemic levels.

The result is predictable: rents will continue to rise, just more slowly than at the peak. The private credit angle connects here too if development finance tightens as discussed in Edition 2, the new BTR supply that was supposed to fill the gap may also slow. The housing supply squeeze is being attacked from multiple angles simultaneously.

What to watch

The 1 May Renters' Rights Act implementation date is now five weeks away. The next few weeks will be critical for landlords deciding whether to sell, hold, or adapt. Watch the RICS landlord sentiment surveys for early signals on how many more exits are coming.

What's driving it: The Middle East conflict has fundamentally repriced the UK interest rate outlook. At its peak on Monday, the 10-year gilt touched 5.096% a level not seen since the 2008 financial crisis. The 2-year gilt has risen nearly a full percentage point in just one month. This is not noise it is a structural shift in market expectations.

The private credit connection: When gilt yields spike to these levels, the cost of capital for private credit funds rises sharply. Development lenders face higher refinancing costs. Bridge loan pricing moves up. The squeeze on property development finance we flagged in Edition 2 is intensifying.

The key number for next week: Watch whether the 10-year gilt holds below 5% as Middle East tensions fluctuate. A sustained break above 5% would trigger another wave of mortgage repricing.

Data: Moneyfacts/Uswitch/Trading Economics, 25 March 2026

Yorkshire has been one of the UK's strongest-performing property markets over the past year and the data released this week reinforces why it deserves close attention.

The headline numbers: The average property price in Yorkshire & The Humber stands at around £237,000–£243,000 significantly below the UK average of £268,000. Price growth over the past year was approximately 2%, well above the UK average of 1.3%. Yorkshire is the 3rd most affordable region in England and Wales, with a price-to-earnings ratio of 5.8x compared to the national average of 8x+.

Where the growth is happening: The strongest growth has been in the more affordable parts of the region. Calderdale led with 3.6% annual growth, followed by Wakefield at 3.1% and Bradford at 2.6%. These are areas where buying costs are lower and demand from first time buyers and northern movers is strongest. First time buyers in Yorkshire are spending 3.6% more year-on-year a sign of genuine demand, not just inflation.

York — the premium end: At the other end of the regional spectrum, York remains the most expensive market in Yorkshire, with home movers paying an average of £355,000 in December 2025 and average rents hitting £1,170/month in January 2026 up 5.7% year-on-year. York's combination of heritage, university presence, and rail connectivity to Leeds and London keeps premium demand strong.

The rental picture: Average monthly rents across Yorkshire & The Humber stand at £843 less than two-thirds of the UK average of £1,367. Yorkshire is still seeing strong rental growth in pockets (4.2% region-wide), driven by cities like Leeds and Sheffield where student and professional demand remains firm.

Why Yorkshire matters right now: Against a backdrop of rising mortgage rates, Yorkshire's affordability makes it one of the most resilient markets in the UK. Buyers can access more square footage for their money, monthly payments are lower at any given rate, and the north-south price growth divergence is widening in Yorkshire's favour. Savills and Hamptons both flagged Yorkshire & Humber as the top forecasted growth region for 2026 at 3.5–4%.

The risk: Yorkshire is not immune to the mortgage rate shock. If rates rise significantly further, demand from first-time buyers the main driver of recent growth could soften quickly.

Next week: East Midlands the region quietly outperforming expectations

The Renters' Rights Act becomes law on 1 May 2026. That is five weeks away. Here is what every landlord needs to do before then:

If you want to sell or repossess your property: Start the Section 21 process now if you haven't already. After 1 May, Section 21 "no fault" evictions no longer exist. You will need a specific legal ground to recover your property, and the process will be significantly slower.

Review your rent: Under the new rules, landlords can only increase rent once per year. If your rent is materially below market rate, a large catch up increase after the Act comes into force will be much harder to achieve. Consider adjusting now but be aware this must be done correctly and with proper notice.

Fixed-term tenancies: Under the Act, all tenancies become periodic (rolling) with no fixed end date. If you have tenants on a fixed-term ending soon, consider what you want to happen next and take legal advice before the Act takes effect.

Get your paperwork in order: Ensure all legally required documents are served gas safety certificates, EPC, How to Rent guide, deposit protection. Any failure here can prevent you from using the new possession grounds.

Send your property questions to [email protected] we answer one every week.

This week: "With mortgage rates rising so fast, is now really a good time to buy or should I wait this out?"

Our answer: The honest answer is that waiting for the "perfect" rate environment has cost many buyers more in rising prices than they would have saved on monthly payments. That said, the current uncertainty is real and significant.

Here is the practical framework: If you are buying to live in the property for 5+ years, the short-term rate environment matters far less than the long-term value of buying versus renting. If you are buying to invest, the numbers need to work at today's rates not the rates you hope for next year.

The case for moving now: Yorkshire and other affordable northern markets are still well priced relative to income. The number of homes for sale is at an 11-year high, giving you genuine negotiating power. Sellers are under pressure over half of homes are requiring at least one price reduction. A 2-year fix now with the option to remortgage in 2028 gives you a definite end point.

The case for waiting: The rate outlook is genuinely uncertain in a way it hasn't been since 2022. If the Bank of England raises rates later this year, properties bought today at these prices could look expensive.

If you are in doubt use our mortgage planning tool to stress test your numbers at +3% above today's rate. If you can afford that scenario, you can likely proceed with confidence.

Educational purposes only not financial advice. Always consult an FCA-regulated mortgage broker.

1. Land Registry: UK House Prices Up 1.3% to £268,000 The HM Land Registry House Price Index, released today (25 March), shows the average UK house price reached £268,000 in January 2026 up 1.3% year-on-year. Scotland mirrored the UK average with 1.3% growth to £188,000. The figures are based on completed transactions and carry a 2-month lag, meaning they predate the recent mortgage market turbulence. The next release will be the first to capture the impact of the Iran shock on actual sale prices. Source: HM Land Registry / ONS, 25 March 2026

2. Amateur Landlord Exodus Accelerates An estimated 93,000 landlords exited the private rented sector in 2025, with 110,000 more expected to follow in 2026 according to research from Savills and London Property analysis. Limited company buy-to-let purchases hit a record 43% of all BTL mortgages in 2025 as professional operators consolidate the market. For tenants, this means a shift toward institutional landlords and higher, more consistently market-rate rents. For buyers, former rental properties entering the sales market may present negotiating opportunities. Source: Savills / London Property, March 2026

3. Building Costs in London Now Second Only to New York New data from Property Week shows the cost of building towers over 20 storeys in London is now second only to New York globally exceeding Seoul by more than three times and Mumbai by ten times. For a market already struggling to deliver enough new homes, this reinforces the structural supply problem. Higher build costs mean fewer viable schemes, fewer completions, and continued upward pressure on prices and rents in the capital. Source: Property Week, 24 March 2026

With lenders repricing daily this week, now is the most important time to run your numbers. See your monthly payment, LTV position, what happens after your fixed deal ends, and how much a +3% rate rise would cost you.

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UK Property Pulse sends every Thursday at 7:30am. Subscribe: ukpropertypulse.co.uk/subscribe Contact: [email protected] UK Property Pulse is not authorised or regulated by the FCA. Nothing in this newsletter constitutes financial advice. Always consult a qualified, FCA-regulated mortgage broker before making mortgage decisions.

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