UK house asking prices rise as supply levels reshape the market

Despite many global property markets being affected by the ongoing war in West Asia, which has disrupted supply chains and driven up energy costs, the UK’s property market remains resilient. According to Rightmove’s latest house price index, the average new seller’s asking price rose by 0.8% in March 2026, while Zoopla reported a 1.3% increase in average house prices over the last year.

Key highlights from March 2026

• Average new seller asking prices are up by 0.8% (+£3,023) to £371,042.
• The number of homes for sale is at an 11-year high.
• The Bank of England (BoE) holds the interest rate at 3.75%.
• The average two-year fixed mortgage rate rises to 4.51% from 4.24%.
• Rental inflation in London slows down to 1.7%

Steady market activity despite war and global tensions

Although a tad slower than last year’s busier markets, the number of sales agreed is 5% higher than at this time of year in 2024. Several property indices have reported steady market activity in the UK, with both new listings and buyer demand showing no signs of slowing since the start of the war in Iran. Our latest research also revealed a more than 20% increase in the value of buy-to-let (BTL) mortgages lent to investors over the past year.

Clear north-south divide in house price growth

Our latest research has revealed that house price growth across the last year was highest in the northern regions (including Scotland) of up to 11%, outperforming the rest of the country. Despite price corrections in the expensive southern areas, including London, the average price in the capital at £551,294 was still more than double the national average of £272,618. Higher borrowing costs and affordability pressures in pricier markets have kept inflation low.

Confidence among home movers holds steady

Zoopla reported a 6% increase in the number of homes for sale compared to a year ago. With mortgage rates going up, a quarter of sales are being reported by cash buyers who aren’t affected by rate changes. Sales numbers also suggest that seller confidence remains resilient, with many sellers continuing to take advantage of the Spring bounce.

Here’s a checklist for sellers looking to maximise their property value for a quick spring sale.

Mortgage rates go up amid market uncertainty

While Zoopla reported that average mortgage rates had increased by 0.4% in March, with fewer sub-4% mortgage deals, Rightmove’s daily mortgage tracker shows the average two-year fixed mortgage rate has risen to 4.51% from 4.24%. However, despite the marginal increase in rates, the Bank of England held interest rates at 3.75%, and the average monthly mortgage repayment on a new purchase is still around £70 lower than this time last year.

Use our free mortgage calculator to find out how much you would need to pay back on your home loan.

New launches, consultations and events across international offices

Following a successful trip by our Directors, Anita Mehra and Marc Von Grundherr, to our offices in Hong Kong and Thailand last month, our overseas offices have several upcoming events scheduled for April. While our team in Hong Kong hosts the exclusive launch of The Orien at The Green Quarter development in Southall, our Malaysia team will launch Wimbledon Bridge House, which is just a 2-minute walk from Wimbledon Station. In India, we have upcoming events in Pune and Delhi for investors keen to buy properties in London.

Rental inflation slows down as supply improves

According to the Office for National Statistics (ONS), average private rents in the UK increased by 3.5% to £1,374 in the 12 months to February 2026. Rental inflation in the capital was lower at 1.7%, owing to affordability pressures in the London rental market. At £2,273, the average rent in London is nearly 66% more than the national average. Within London, Kensington & Chelsea reported the highest average monthly rent at £3,628.

According to Zoopla’s latest rental market report, demand for rental homes is 14% lower than a year ago, as more first-time buyers have moved from renting to home ownership due to easing mortgage rates. Supply has also improved, as the number of homes available to rent is 11% higher than a year ago. However, despite supply getting better, there are still 23% fewer homes to rent than pre-pandemic levels.

Supply in London gets tight ahead of the Renters’ Rights Act changes

While supply in other parts of the UK may seem to be improving, London continues to face a shortage. Our latest research has revealed that less than 3% of the total rental stock is currently available to tenants as listed on the market. According to the research, of the total 1,188,368 estimated rental homes across the capital, only 34,776 are currently listed for rent, which is equivalent to 2.9% of the total stock. With the first phase of the Renters’ Rights Act set to take effect on May 1, there are growing concerns about additional strain on the supply.

As a leading London-based estate and lettings agent, Benham and Reeves brings you the latest and best investment opportunities across the UK capital. Our London-wide network of branches, combined with our international offices, is always at hand to help overseas buyers, sellers and landlords with a full range of services.

Contact us to speak with our property experts about your investment goals.