A new report has revealed that the ongoing conflict in the Middle East is set to have a devastating impact on the UK housing market. The Iran war has disrupted energy supplies, leading to a global oil price surge, which in turn is pushing up production costs for UK businesses. As a result, interest rates are expected to rise, making it even more difficult for first-time buyers to get on the property ladder.
The UK economy is highly dependent on imported energy, with oil and gas accounting for over 90% of the country's fuel needs. With global oil prices expected to remain high, businesses will be forced to increase their prices to cover the higher costs of production. This, in turn, will lead to higher interest rates, making it more expensive for people to borrow money to buy a home.
According to a spokesperson for the UK's Office for Budget Responsibility (OBR), 'The impact of the Iran war on the UK economy is likely to be significant, with higher energy costs and interest rates putting pressure on household budgets.' The OBR has warned that house prices could fall by up to 10% as a result of the interest rate hike.
The news will come as a blow to many UK homeowners, who are already feeling the pinch from rising living costs. The UK Government has been urged to take action to mitigate the impact of the Iran war on the housing market, with some calling for a freeze on interest rates to help first-time buyers.
As the situation continues to unfold, the UK Government has advised British nationals to exercise caution when travelling to affected areas. The Foreign Office has issued a warning to Britons to avoid non-essential travel to the region.
The UK's largest property developers have warned that the Iran war will have a 'profound impact' on the housing market, with some predicting that prices could drop by as much as 15% in the coming months.