TL;DR
- •UK house prices rose by 3% in March 2026, impacting mortgage payments for both first-time buyers and remortgagers.
- •The current base rate of 3.75% also plays a role in these changes..
- •This growth, although slightly muted compared to the 0.9% rise in February, still represents an increase in values by 0.4% compared to the previous month.
As of May 2026, the UK housing market has seen a 3% rise in house prices in March, according to Nationwide’s house price index. This growth, although slightly muted compared to the 0.9% rise in February, still represents an increase in values by 0.4% compared to the previous month.
Impact on First-Time Buyers, Remortgagers, and Landlords
First-Time Buyers
For first-time buyers, this rise in house prices might seem daunting. Let’s consider a scenario where a first-time buyer is aiming for a property valued at £250,000. With a 90% loan-to-value (LTV) ratio, they would need to secure a mortgage of £225,000. If they were to secure a fixed rate mortgage at the current base rate of 3.75%, their monthly repayments would be around £1,043. This is an increase of approximately £21 per month compared to the scenario six months ago when the base rate was at 3.5%.
Remortgagers
For existing homeowners looking to remortgage, the rise in house prices could mean more equity in their homes. Consider a homeowner with a property valued at £300,000, with a remaining mortgage balance of £200,000. With the increase in house prices, their home could now be worth £309,000. If they were to remortgage at a 75% LTV, they could potentially release £31,750 in equity. However, with the current base rate of 3.75%, their monthly repayments would increase from £917 to £943, an increase of £26 per month.
Landlords
For landlords, the rise in house prices can affect rental yields and capital appreciation. Let’s consider a landlord with a £200,000 interest-only buy-to-let mortgage. With the current base rate of 3.75%, their monthly cost would be around £625. This is an increase of approximately £31 per month compared to the scenario a year ago when the base rate was at 3.25%.
Market Context
The current rise in house prices comes amidst a backdrop of rising market interest rates. The Bank of England base rate is currently at 3.75%, up from 3.5% six months ago and 3.25% a year ago. Despite this increase, the impact on affordability has been limited, as swap rates, which underpin fixed rate mortgage pricing, remain well below the highs reached in 2023 and are broadly in line with levels prevailing in late 2024. In comparison to the house price growth of 2.5% seen in March 2025, the current 3% growth indicates a more price-sensitive market where realism and accurate positioning are key.
Frequently Asked Questions
How does the rise in house prices affect my mortgage payments?
For existing homeowners, a rise in house prices could mean more equity in your home, which could potentially reduce your loan-to-value ratio and lower your monthly repayments. However, for first-time buyers, a rise in house prices could mean higher mortgage payments.
What is the current base rate?
The current base rate, as of April 2026, is 3.75%. This is the rate set by the Bank of England and it influences the interest rates offered by banks and building societies.
What are swap rates?
Swap rates are the rates at which banks lend to each other. They underpin fixed rate mortgage pricing and can influence the interest rates offered to consumers.
How does the rise in house prices affect my remortgage?
If you’re looking to remortgage, a rise in house prices could mean more equity in your home. This could potentially allow you to secure a lower loan-to-value ratio, which could result in lower monthly repayments.
About David Sampson
David Sampson writes about the UK mortgage market for Mortgage118, covering specialist lending, market trends, and practical advice for borrowers. All content is reviewed for accuracy against FCA guidelines and current market data.