European equities finished little changed on Monday, surrendering earlier gains as the 10-year US Treasury yield climbed above 5.25%.

The Stoxx Europe 600 index closed roughly flat.

The UK government unveiled a new loan program aimed at first-time homebuyers, which JPMorgan analysts described as a potential "game changer."

Shares of UK homebuilders Taylor Wimpey, Bellway, Persimmon, and Barratt Redrow each rose more than 10%.

Brent crude headed toward $108 a barrel after US President Trump rejected Iran's latest ceasefire proposal, lifting oil majors' shares.

Mining stocks fell 1.1% as gold and other precious metals tumbled.

European stocks are set to end a five-month winning streak in September, as surging energy prices stoke inflation fears and push global bond yields higher.

Traders are ramping up rate-hike bets, with US markets pricing in three increases and the possibility of a fourth.

"Overall, the economy is resilient, investment in artificial intelligence is ongoing, and equities can effectively hedge against inflation," said Gilles Guibout, head of equities at BNP Paribas Asset Management. "There may be a tipping point ahead where rising yields start to hurt the economy, but we are not there yet."