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House prices in the United Kingdom (UK) have recorded their first monthly decline since December 2025, as economic uncertainty linked to the conflict involving Iran continues to affect consumer confidence and borrowing costs.
According to Reuters, data released on Monday by mortgage lender Nationwide showed that UK house prices fell by 0.6 percent in May, marking the biggest monthly drop since June 2025. On an annual basis, house price growth slowed to 1.7 percent in May, down from 3 percent in April and below market expectations.
Nationwide’s Chief Economist, Robert Gardner, said the slowdown was not unexpected given recent global developments.
“Given the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices and market interest rates, some loss of momentum was to be expected,” Gardner said.
He added that consumer confidence has weakened since the start of the conflict.
The Iran war has pushed up energy prices and raised expectations that the Bank of England may raise interest rates later this year rather than cut them. As a result, mortgage costs have risen.
Additionally, the recent figures from Rightmove showed the average rate for a two-year fixed mortgage climbed to 5.13 percent, while a five-year fixed mortgage stood at 5.15 percent.
The Royal Institution of Chartered Surveyors also reported weaker housing demand, specifically in London and southern England, where prices are generally higher. The latest figures suggest the UK housing market remains under pressure as households continue to experience rising costs and economic uncertainty.
