“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”
– Amanda Bryden – Halifax
The latest data released by Halifax has revealed that the rate of house price growth fell marginally between February and March by -0.5%.
The price of a typical home in the UK now stands at £296,699, down from £298,274 in the previous month.
Halifax says that the annual rate of growth remained at +2.8% during March, unchanged from February.
National and regional breakdown
According to this morning’s data, Northern Ireland has continued to record the strongest annual property price growth of any nation or region, rising by +6.6% in March, with house prices here averaging £206,620.
Scotland recorded the second strongest house price growth, increasing to +4.3% last month, compared to +3.8% in February. The average house price here is now £213,750.
Property prices in Wales were also up +3.7% in March, to an average of £227,332.
In England, Yorkshire and Humberside also saw strong growth, up +4.2% compared to the previous year, with properties now costing an average of £215,807.
London saw the slowest annual house price growth, from +1.5% in February to +1.1% in March. The capital retains the top spot for the highest average house price in the UK, at £543,370
“UK house prices fell by -0.5% in March, a drop of £1,575. Despite this, the annual growth rate remained steady at +2.8%, with the typical UK property now valued at £296,699,” comments Halifax head of mortgages, Amanda Bryden. “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 are slowing. Our customers completed more house sales in March than in January and February combined, including the busiest single day on record. Following this burst of activity, house prices, which remain near record highs, unsurprisingly fell back last month.”
She adds, “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.”
Industry reactions
“The property market remains fighting fit despite the wider economic turbulence faced on numerous fronts, not least from Trump and his tariff war, and whilst we may see the odd monthly adjustment, the real proof in the pudding is a robust level of annual growth,” says director of Benham and Reeves, Marc von Grundherr.
“So whilst homeowners could find that the cost of some imported US items might rise should the UK government take a tit for tat approach towards Trump, it could result in a swifter reduction in mortgage rates if inflation remain stubbornly persistent and the Bank of England moves to curb it with a hastened schedule of interest rate cuts.”
David Johnson, managing director of INHOUS, comments, “In March, the property market has seen a high level of buyer activity which was partially boosted by American house hunters looking to relocate to the UK. This uplift in buyer demand is contributing to a competitive spring market which sees the majority of sellers achieving their asking price if valued accurately. We advise buyers to start their search as early as possible and be prepared for tough price negotiations.”
Chief sales officer for Foxtons, Jean Jameson, said, “The property market momentum seen throughout 2024 has continued over the first quarter of this year, with the recent reductions to interest rates and the resulting improvements to mortgage affordability proving to be the greatest motivator for homebuyers entering the market in 2025.”
He adds, “As the year progresses, we expect to see house prices continue to strengthen, buoyed by the prospect of further interest rate reductions.”
Yopa CEO Verona Frankish commented, “Despite a marginal month-on-month reduction, the long-term view of the UK property market shows that house prices continue to sit higher than they did this time last year and even versus the previous quarter.
She adds, “The nation’s homebuyers have responded favourably as mortgage rates have fallen from the peak seen in August 2023 and whilst they may remain considerably higher than they’ve become accustomed to, market confidence and property values have grown in line with the expectation that the cost of borrowing is only set to trend downwards over the coming year.”
CEO of Octane Capital, Jonathan Samuels, commented, “We’ve seen considerable improvements to the mortgage landscape over the last 12 months and this has driven a heightened degree of buyer activity, which in turn, has ensured that house price growth has remained strong and stable, with property values up on both a quarterly and annual basis.
“This positive rate of appreciation has come despite the wider economic headwinds blowing in from the United States and elsewhere around the world, with the expectation being that the UK property market will continue to march forward undeterred.”
Nathan Emerson, CEO of Propertymark said, “This house price reduction will be a huge disappointment to many sellers hoping to make gains on a house sale to climb up the housing ladder, but it could also be an opportunity for aspiring homeowners to take advantage of the slight reduction in house prices and take their first step, or next step, onto the housing ladder.
“Hopefully, this month-on-month dip is only temporary. The spring and summer months normally spur a flurry in housing activity, especially at a time when there are many competitive mortgage deals out there right now as a result of the reduction in interest rates last year.
“However, with housing playing a vital role in the UK economy, international events could jeopardise the Bank of England’s target of a 2 per cent inflation rate, which may thwart their ambitions to reduce interest rates further. The housing market must remain stable ahead of the Bank of England’s next decision on interest rates in May.”