UK house price growth fell in March as a flurry of buying activity, linked to a stamp duty threshold change introduced on 1 April, slowed.
According to the Halifax House Price Index released on Monday, UK house prices dropped 0.5% in March on a monthly basis, compared to February’s 0.2% decline. This was also below analyst expectations of a 0.2% rise.
Compared to February, the rate of annual house price growth remained steady at 2.8% in March. Looking at the year-on-year total, this figure showed the least monthly movement since July 2024. The annual rate for February and March was also the lowest seen since July 2024.
Northern Ireland was the top performing area, with yearly house prices advancing 6.6% in March, while London experienced the weakest performance, with only 1.1% annual growth.
“House prices rose in January as buyers rushed to beat the March stamp duty deadline. However, with those deals now completing, demand is returning to normal and new applications slowing. Our customers completed more house sales in March than in January and February combined, including the busiest single day on record,” Amanda Bryden, head of mortgages at Halifax, said.
“Following this burst of activity, house prices, which remain near record highs, unsurprisingly fell back last month,” she added.
What is the average property price across the UK?
Average property prices in Northern Ireland came to £206,620 (€241,946.9) in March.
Scotland saw the second fastest annual rate of growth, with property prices advancing 4.3% in March, up from 3.8% in February. The average house set buyers back by £213,750 (€250,316.2) in March.
Annual house prices in Wales also grew 3.7% last month, with buyers having to shell out £227,332 (266,221.7) on average for a property.
Yorkshire and Humberside recorded robust annual house price growth in England, totalling 4.2%, with the average property price coming to £215,807 (€252,759.6).
London continued to be home to the most expensive houses in the UK, with the average property price rising to £543,370 (€284,972.9). That’s despite slower growth of 1.1% in March, compared to 1.5% in February.
Homebuyers set to become more cautious
Now that the new stamp duty threshold changes have come into effect in the UK, house buyers are likely to be more hesitant to buy properties in the short term at least, as they deal with higher prices.
“Homebuyers are likely to be reassessing their options much more carefully now, as they have not only missed the boat to secure lower property tax charges but must also contend with a very uncertain economic outlook,” Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said.
“Affordability levels may have improved slightly thanks to easing mortgage rates – a result of three interest rate cuts since August last year – along with resilient wage growth, but April is proving to be a challenging month,” she added.
UK employers will need to pay more National Insurance contributions on employee salaries starting this month, as well as a higher minimum wage. These additional costs could be passed on to potential homebuyers, along with several increases in household bills and more taxes, which may all contribute to decreased house buying activity.
The worldwide economic uncertainty caused by US president Donald Trump’s tariffs, as well as the threat of an escalating trade war, could also be a major factor impacting housing market activity in the coming months.
Bryden from Halifax noted: “Looking ahead, potential buyers still face challenges from the new normal of higher borrowing costs, a limited supply of available properties to choose from, and an uncertain economic outlook.
“However, with further base rate cuts anticipated alongside positive wage growth, mortgage affordability should continue to improve gradually, and therefore we still expect a modest rise in house prices this year.”
