House prices rise by nearly £3,000 as Iran conflict keeps mortgage rates high

But the 0.8% monthly rise in the typical asking price was lower than the long-term average increase of 1.2% seen in the month of April, the company said.

Across Britain, the average asking price in April is £373,971, which is £2,929 higher than the previous month.

Increased mortgage rates and strong competition among sellers to find a buyer are limiting new seller asking price growth this spring, with the number of homes for sale at an 11-year high for the time of year, Rightmove said.

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Buyer demand has held up relatively stronger among first-time buyers, it said, suggesting that higher mortgage rates are not putting off new potential first-time buyers from making inquiries.

But it said price growth in April has been mainly driven by higher-priced, “top of the ladder” homes with four bedrooms or more, where some buyers are cash purchasers and are less sensitive to increased borrowing costs.

Colleen Babcock, a property expert at Rightmove, said: “With mortgage rates remaining elevated due to the war in Iran, it’s not a surprise that price growth is proving strongest in parts of the market less exposed to higher borrowing costs."

“Across Great Britain, Scotland stands out as an example of resilience, with average prices rising by over 4%. Lower average asking prices and a faster home-buying process continue to support price growth in the Scottish market.

“However, for most of the market, the combination of rising mortgage rates and the number of homes for sale being at its highest level for the time of year over a decade, means that competitive pricing is crucial for sellers this spring.”

Matt Smith, a mortgage expert at Rightmove, said: “At the start of the year there was growing optimism that (the Bank of England) base rate would continue to fall, but that picture has shifted following the conflict in Iran.”

He added: “The initial shock appears to have passed, with mortgage rates stabilising over the past couple of weeks, but they remain elevated.

Several lenders have made mortgage rate reductions in the past week following falls in swap rates, which are used by lenders to price mortgages.

Marc von Grundherr, director of Benham and Reeves, said: “The combination of heightened geopolitical uncertainty and the increase in mortgage rates has understandably caused some buyers to pause for thought, particularly across the higher end of the market where affordability is already stretched".

“However, what we’ve seen is not a collapse in confidence, but a more cautious and considered approach from both buyers and sellers.”

He added: “London is often one of the last markets to turn, but when momentum does begin to build it tends to do so strongly.

Polly Ogden Duffy, managing director at John D Wood & Co said: “With an increased supply of homes – particularly flats lingering from 2025 – buyers have more choice and are less inclined to engage with overpriced properties, meaning sellers who price too ambitiously risk missing out on serious, proceedable buyers.

“In contrast, the family housing market is continuing to perform strongly, especially in areas with sought-after schools, where demand can still outstrip supply and, in some cases, result in multiple bids.”

The report was released as separate research from property firm Hamptons, said that rental price growth on newly-let homes accelerated in March.

The pace of rental price growth on newly-let homes picked up in March, with average annual growth across Britain doubling from 0.5% in February to 1.0% in March, to reach £1,373 on average per month, Hamptons said.