Global unrest leaves the housing market on edge

A market on edge

The mood among buyers has changed. With the Iran war hanging over the outlook, estate agents say people are nervous and want to secure a mortgage now, in case borrowing costs rise later in the year. The year started briskly. The first signs of hesitation are now showing.

You can see the same pattern well beyond any one island or town. Buyers who were happy to take their time are moving to lock in deals, and some would-be movers have paused to see how the conflict plays out. The rush of activity from earlier in the year has started to cool.

Where the strain shows

Jersey shows the strain clearly. House prices there fell 5% in the first quarter of 2026 against the same period a year earlier. With an average three-bedroom home around £695,000, agents say the typical couple can realistically afford only a one-bedroom flat. Bradley Vowden, an estate agent at Gaudin and Company, expects the next three to six months to be harder as the conflict feeds through. Sales already take six to eight weeks, and he says buyers are “struggling to get mortgage offers”, with applications running longer than before.

Fear versus the Bank’s signal

Most of the nervousness comes down to a fear of steep rate rises. Some in the market have talked of as many as six increases, or around 1.5%, in the second half of the year. It is worth separating that speculation from what the Bank of England has actually signalled. The Bank has held base rate at 3.75%, and Governor Andrew Bailey has said markets pricing in a run of rises are “getting ahead of themselves”.

You saw the same caution on the mainland through the spring, when lenders pulled hundreds of low-deposit deals as fixed rates jumped. The uncertainty is real. Still, acting on fear of a forecast the Bank itself is pushing back on carries its own risk.

What it means if you’re buying or remortgaging

When the market gets jittery, the steady move is to base your decision on your own numbers, not the loudest headline. Whether you are weighing when to remortgage or buying a first home, the rates you would actually qualify for tell you more than any forecast.