UK house prices rise for first time since start of Iran war

UK house prices rose in June for the first time since the Iran war began in late February, though values remain just below January levels, according to the Lloyds house price index [1]. The typical property cost £299,330 in June, a 0.2% monthly increase that followed a 0.2% decline in May [1]. The annual growth rate edged up to 0.6% from 0.5% [1]. June’s gain was the first monthly rise since February, when prices hit £301,051, but the figure still trails the £300,283 recorded in January [1]. Amanda Bryden, head of mortgages at Lloyds, said price trends “continue to reflect wider economic uncertainty, including the impact of global events on inflation and interest rate expectations” [1]. The US-Israeli strikes on Tehran on 28 February 2026 ignited a four-month conflict that included the assassination of Supreme Leader Ali Khamenei and the closure of the Strait of Hormuz [2]. The International Energy Agency characterized the resulting supply disruption as the “largest supply disruption in the history of the global oil market” [5]. Brent crude surged past $120 per barrel after the strait was blocked on 4 March, and the oil production of Kuwait, Iraq, Saudi Arabia and the UAE collectively dropped by at least 10 million barrels per day by 12 March [5]. The shock pushed up inflation and reversed expectations of Bank of England rate cuts into forecasts of increases [1]. Oil prices have since retreated to around pre-war levels, with Brent trading near $72 a barrel on Tuesday, up 1.1% [1]. The Strait of Hormuz has reopened, allowing stranded tankers to pass, though the situation remains fragile [1]. Iran’s military fired at least two missiles at commercial ships transiting the strait on Monday night, two US officials told Axios [1]. A fragile ceasefire is in place while the US and Iran attempt to negotiate a permanent peace deal [2]. Bryden noted that mortgage rates have eased from recent highs, “offering some encouragement to those considering a move” [1]. For first-time buyers, annual price growth increased to 0.8% in June from 0.3% in May, with the average first-time buyer property now costing £240,433 [1]. “Lower borrowing costs should provide some support for demand, though affordability constraints remain an important factor,” Bryden said [1]. Northern Ireland recorded the strongest annual house price growth in the UK, with prices up 7.4% over the past year to £229,000 [1]. Scotland followed at 3.9% annual growth, reaching an average of £223,277 [1]. Wales posted a 0.9% annual rise to £231,142 [1]. In England, growth remained concentrated in northern regions: the north-east rose 2.8% to £181,133 and the north-west climbed 2.4% to £248,218 [1]. Prices continued to fall in the south, with the south-east down 2% year-on-year to £381,654 and London declining 1.1% to £534,831 [1]. The war’s economic impact extended well beyond energy markets. A UN Development Programme study released on 30 March estimated the conflict could reduce economic growth in Arab nations by $120–194 billion in GDP [5]. The maritime blockade triggered a “grocery supply emergency” across Gulf Cooperation Council states, which rely on the Strait of Hormuz for over 80% of their caloric intake; by mid-March, 70% of the region’s food imports were disrupted [5]. The conflict also precipitated a second major energy crisis for Europe, with Dutch TTF gas benchmarks nearly doubling to over €60/MWh by mid-March as Qatari LNG shipments were suspended [5].