Yesterday afternoon, markets received the news they had been waiting five weeks for: a conditional US-Iran ceasefire, with Tehran agreeing to reopen the Strait of Hormuz as part of a two-week deal.

The reaction was immediate and dramatic. Oil prices fell 14–15% to around $94 per barrel. UK 10-year gilt yields dropped 21 basis points. The 2-year gilt fell by a similar margin. Bank shares surged — Lloyds, the UK's largest mortgage lender, was up over 8% in Wednesday trading. The FTSE 100 rallied broadly.

For the mortgage market, the gilt move is the one that matters. The 10-year yield had been sitting at around 4.85% — near 18-year highs — before the ceasefire news. It is now closer to 4.65%. Swap rates, which underpin fixed mortgage pricing, have also started to pull back. If this easing continues and holds, lenders may begin introducing lower-rate products within weeks.

But here is the critical context that gets lost in the relief rally:

The average two-year fixed mortgage rate hit 5.9% on 8 April — its highest level since July 2024 — before the ceasefire news broke. That means mortgage holders who locked in a deal yesterday or today are still doing so at rates that are over 1 percentage point higher than they were before the conflict began on 28 February.

The ceasefire is also a fragile one. It is a two-week pause, not a peace deal. Strikes were still continuing as the agreement was announced. Iran has previously threatened to close the Strait of Hormuz again if a full ceasefire is not reached. The situation remains volatile.

And crucially — the economic damage from the past five weeks does not simply disappear when oil prices fall. The Food and Drink Federation has warned that grocery inflation is likely to hit 9–10% later this year. UK-wide CPI is still forecast by the OECD to approach 4% in the second half of 2026. That inflationary pressure has already been baked into supply chains, energy contracts and forward pricing. Even a sustained drop in oil to pre-conflict levels — which most experts do not expect — would take months to filter through into lower consumer prices.

What this means for mortgage holders

The ceasefire is genuinely positive news for the trajectory of rates. If the pause holds and oil continues to fall, the Bank of England will have more room to hold — and potentially cut — rather than hike. Swap rates could ease further, giving lenders room to reduce fixed-rate pricing.

However, as one mortgage industry expert noted: even if swap rates fall from here, it may be "several months before we see sub-4% mortgages again." The product range has been significantly depleted. Rebuilding consumer confidence takes time.

The message this week is: cautious optimism, not complacency. The direction of travel has changed. But anyone with a mortgage decision in the next three months should still act proactively rather than assume rates will fall quickly or significantly.

The 30 April BoE decision — still critical

Markets had been pricing a 50% chance of a rate hike at the 30 April MPC meeting before the ceasefire. That probability has now faded significantly. A hold remains the most likely outcome. But the vote split — and the tone of the language from Governor Bailey — will be closely watched for signals about whether cuts remain on the table later in 2026.

Halifax released its March House Price Index this morning and the numbers confirm what many buyers and sellers have been feeling on the ground.

UK house prices fell 0.5% in March, taking the average property price to £299,677. That is a reversal of the 0.3% rise seen in February — and it takes annual house price growth down to just 0.8%, its slowest rate in months.

Halifax's head of mortgages, Amanda Bryden, was direct about the cause: "The recent slowdown in the housing market reflects the wide uncertainty regarding the conflict in the Middle East. Concerns about higher energy prices have pushed up inflation expectations, which in turn led to a rise in mortgage rates, reducing confidence that interest rates will be cut this year."

How bad is this, in context?

A single month of data is not a trend — and Halifax is clear that March 2026 is "a poor indicator of where the market will go next." The financial markets have been moving far faster than the property market. Transaction times of 8–12 weeks mean that house prices are only now beginning to reflect the mortgage rate increases of early March. The real question is what happens to April and May data as the ceasefire takes effect.

Zoopla's March House Price Index, released this week, offers a more nuanced view. Their data shows UK house price inflation stable at +1.3% year-on-year, with the average UK house price at £270,500. Crucially, Zoopla notes that sales agreed are running just 2% below last year's levels — a much smaller fall than the drop in buyer enquiries would suggest. The buyers who remain in the market are more committed and better prepared.

The private credit angle

The Halifax data matters for the private credit story we have been tracking since Edition 2. Falling house prices — even modest ones — increase the stress on property-backed lending. Private credit funds that lent against UK commercial and residential property at higher valuations are now facing a more challenging environment. The Bank of England's system-wide stress test of private credit markets, launched in December 2025, will use scenarios including falling property values. Its interim findings are expected later this year.

What sellers need to know right now

The market has not crashed. But the sellers who are succeeding are those pricing accurately from day one. Zoopla data shows that overpriced properties are sitting on the market and then reducing — sometimes by 6–10% from the original asking price. In the South West and London, discounts are steepest. In northern regions, the market remains more competitive.

If you are planning to sell this spring, the single most important thing you can do is price your property correctly at launch. In this market, a week with few viewings can cost you more than pricing 5% lower from the start.

The ceasefire effect: Yields fell 21 basis points on the 10-year and a similar amount on the 2-year in a single session following the ceasefire announcement. This is the largest single-day move downward since the conflict began. It reverses some — but not all — of the damage done over the past five weeks.

The private credit connection: Falling gilt yields reduce the cost of capital for private credit funds and ease refinancing pressure. This is mildly positive for the development finance market. However, with commercial real estate default rates above 20% and the BoE stress test ongoing, the structural pressure on private credit has not gone away.

Key dates: Next BoE meeting 30 April. Land Registry HPI for February released 22 April.

Data: HomeOwners Alliance/Moneyfacts/Halifax, 8–9 April 2026

The South West had one of the most dramatic property market stories of the pandemic era — and it is now navigating one of the most complex corrections.

The pandemic surge: Between 2020 and 2022, coastal and rural areas of Devon, Cornwall, Somerset and Dorset saw extraordinary price increases as buyers flooded out of cities. In prime coastal markets, average prices jumped 15.6% in 2021 alone, according to Savills. Devon, Cornwall, and the surrounding coast became the most searched locations on Rightmove. Competition for homes in places like Salcombe, Padstow, and the South Hams was intense.

The correction: The South West is now one of only three English regions where house prices have fallen over the past year, alongside London and the South East. Average property prices in the region stand at around £353,000 — the 4th most expensive region in England and Wales — but prices fell approximately 1% over the past 12 months. The price-to-earnings ratio at 8.4x is significantly above the UK average of around 8x, reflecting the mismatch between prices inflated by pandemic-era demand and local incomes that haven't kept pace.

Inside the region: Bristol is the most expensive market in the South West, with an average house price of around £389,000 for new builds and average mortgage purchases at £354,000. Bristol rents have surged 7.6% in the past year — among the fastest in England — driven by its large student and young professional population. First-time buyers in Bristol face an average price of £314,000.

Devon and Cornwall are experiencing a more pronounced correction. Homes in the South Hams that were selling above asking in 2021 are now taking 43 days to sell on average — slower than the national average — and buyers have significantly more negotiating power. Cash buyers represent 28% of South West transactions, higher than the national average, which partly reflects the wealth of buyers who moved to the region during the pandemic.

Exeter is currently the best-performing prime market in the South West, with a combination of university employment, rail connectivity to London, and a more sustainable demand profile than the coastal hotspots.

The mortgage rate sensitivity: The South West's higher average prices mean the region is more exposed to mortgage rate rises than more affordable northern markets. A 1% increase in mortgage rates costs a buyer of an average South West property around £130–150 more per month than a buyer of an average Yorkshire property. This is one reason why buyer demand has softened more sharply here than in the North.

The buy-to-let picture: Holiday let licensing rules introduced in 2026, requiring mandatory registration of all short-term lets in England, are creating additional uncertainty for Airbnb-style investors in coastal areas. Properties bought as holiday lets may face licensing requirements and restrictions — another pressure on local housing supply dynamics.

What to watch: If the ceasefire holds and mortgage rates ease through Q2 2026, the South West's higher-priced markets should see demand recover. But a return to 2021-era price levels seems unlikely in the near term. Sellers here need to be realistic.

Next week: The North East — the UK's most affordable region and why it's attracting attention

The Renters' Rights Act comes into force on 1 May 2026 — just 22 days away. Here is your urgent checklist for this week:

Action 1 — Issue the information sheet now The official Renters' Rights Act Information Sheet 2026 must be given to all tenants with a written tenancy agreement by 31 May 2026. Download the exact PDF from gov.uk and send it as an email attachment or print it — do not send a link to the PDF as this does not count. Failure carries a fine of up to £7,000.

Action 2 — Section 21 deadline is imminent If you want to serve a Section 21 "no fault" eviction notice, you must do so before 1 May 2026. After that date, Section 21 is abolished. If you have already served a valid Section 21, legal proceedings must begin before 31 July 2026.

Action 3 — Check your rent Under the new Act, landlords can only increase rent once per year via a Section 13 notice. If your rent is below market rate, a catch-up increase will be much harder to achieve after 1 May. Consider whether you need to serve a notice now.

Action 4 — Verify your compliance paperwork All gas safety certificates, EPCs, How to Rent guides and deposit protection must be in order. The Act strengthens councils' powers to act against landlords who don't meet standards.

Send your questions to [email protected]

This week: "The ceasefire was just announced. Should I wait a few weeks to see if mortgage rates fall before locking in a deal?"

Our answer: It is a reasonable instinct but a risky strategy. Here is the honest picture.

Yes, if the ceasefire holds, swap rates will likely ease further and lenders may begin reducing fixed-rate pricing. We could see the average 2-year fix fall from 5.84% toward 5.5% over the coming weeks if conditions remain calm.

But "if" is doing a lot of work in that sentence. The ceasefire is a 2-week pause, not a peace agreement. Oil is still 30% above pre-conflict levels. Grocery inflation is expected to hit 9–10% regardless of what happens next. The Bank of England still has to weigh a potential CPI approaching 4% before it can confidently cut rates.

The practical framework: if your mortgage deal expires within the next three months, lock in something now. Most offers last 3–6 months — you can secure a rate today and rebook at a lower rate if rates fall before completion. The downside of locking in is limited. The downside of waiting and being wrong is significant monthly payments at whatever rate you end up with.

If your deal is not expiring for 6+ months, you have more time to see how events develop. But don't set yourself a reminder for "June" and forget about it — watch this space weekly.

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

1. Mortgage Approvals Down 4% in February — But Holding Up The Bank of England recorded 62,584 mortgage approvals for house purchases in February 2026 — down 4% year-on-year but up 4% from January. The data predates the Iran shock and the subsequent mortgage market turbulence, making April and May data the ones to watch. What the February number does confirm is that the market was in reasonably solid shape going into the conflict — not the fragile state it was in during the 2022 mini-Budget crisis. Source: Bank of England / House of Commons Library, April 2026

2. House Building Starts Up 24% in Q4 2025 One piece of genuinely positive news from this week's data: house building starts in England rose 23% quarter-on-quarter in Q4 2025, up 24% year-on-year. The MHCLG attributes the jump partly to reforms at the Building Safety Regulator. Completions also rose 9% quarter-on-quarter. These are encouraging numbers for housing supply — though as we have tracked across previous editions, the private credit squeeze on development finance means the pipeline may be harder to sustain in 2026. Source: MHCLG, via House of Commons Library

3. Savills: Prime Markets Show "Renewed Caution" Despite Strong Start to 2026 Savills this week warned of renewed caution across prime UK property markets despite a positive start to the year. Prime Central London prices fell 0.7% in Q1 2026 — an improvement on Q4 2025 but still negative. Country house prices fell 0.3% over the same period. Savills noted that recent events are likely to reinforce London's status as a safe haven for overseas buyers — particularly in an "attractively priced" PCL market now down 25% from its 2014 peak — but that higher Stamp Duty costs will moderate any price upward pressure. Source: Savills Prime Property Report, April 2026

The ceasefire may start to bring rates down from their 5.9% peak — but they're still over 0.8 percentage points higher than when we launched. Use our free tool to model your payments at current rates and see exactly what the difference means for your budget.

→ tools.ukpropertypulse.co.uk

Free. No sign-up. Educational purposes only — not financial advice. Always consult a qualified, FCA-regulated mortgage broker.

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.

© UK Property Pulse 2026