UK house prices fell in March – Halifax

The average price of homes in the UK fell by 0.5% in March, marking a sharper decline compared to the 0.2% drop seen in February, Halifax reports.

It says that the average property value is £296,699, a drop of £1,575 from £298,274 the previous month.

Despite the monthly downturn, the annual increase in house prices holds firm at 2.8%, identical to February’s figure.

Demand returns to normal

Amanda Bryden, the head of mortgages at Halifax, said: “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.”

She added: “Following this burst of activity, house prices, which remain near record highs, unsurprisingly fell back last month.”

Ms Bryden is predicting that higher borrowing costs will impact buyers, plus they’ll have to contend with fewer properties on sale and an uncertain economic outlook.

Regional price fluctuations

Regionally, the housing market shows varied performance with Northern Ireland leading as prices rose by 6.6% in March to an average of £206,620.

Scotland follows with price increases of 4.3% last month from 3.8% in February, pushing the average price to £213,750.

Wales also experienced an uptick, with property values rising by 3.7% to an average of £227,332.

In England, Yorkshire and Humber lead with an annual rise of 4.2% and an average property price of £215,807.

Conversely, London, although still commanding the highest average house price at £543,370, recorded the weakest annual growth, slipping from 1.5% in February to 1.1% in March.

Reaction from the property sector

Nathan Emerson, Propertymark‘s chief executive, 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 on 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.”

Mark Harris, the chief executive of mortgage broker SPF Private Clients, said: “The monthly dip in prices is unsurprising as borrowing costs, which have softened a little recently, remain higher than many buyers were paying not that long ago.

“However, with Swap rates falling considerably in recent days on the back of President Trump’s tariffs, a significant margin has opened up between Swaps and mortgage rates – if this continues, lenders could respond with a flurry of five-year fixed rates starting with a ‘3’ as opposed to the current position of only one or two priced under 4%. This would help affordability and give buyers renewed confidence to make their move.”

Tom Bill, the head of UK residential research at Knight Frank, said: “As buyers adapt to higher rates of stamp duty, the positive news is that US trade tariffs announced last week have put downwards pressure on borrowing costs as markets price in an economic slowdown.

“The Bank of England is now expected to cut rates three times this year rather than twice.

“The risk is that tariffs ultimately prove to be inflationary, and the spillover effects mean upwards pressure on mortgage costs in the UK. For now, the spring market feels steady although the prospect of a tax-raising autumn Budget will throw more uncertainty into the mix later this year.”

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “Although the small reduction in house prices noted last month has continued, activity still held up relatively well as the figures will not cover transactions which completed before the deadline to take advantage of the stamp duty concession.

“There’s no doubt that many purchases were brought forward as a result so we might have expected to see more impact in the data.

“Buyers and sellers who missed out on the stamp duty savings had the choice to stay put, keep to previously agreed terms and continue with their move or try to re-negotiate in an attempt to find some middle ground.

“The last option has proved the most popular in our offices.”