House prices in the UK experienced a slight decline in March, signalling a cooling in the property market as the stamp duty holiday came to a close, according to figures from Halifax.
The average house price dropped by 0.5% compared to February, equating to a fall of £1,575. This brings the typical cost of a UK home to £296,699. Despite the monthly dip, prices were still 2.8% higher than in March the previous year, matching the annual rate seen in February.
Amanda Bryden, Head of Mortgages at Halifax, explained the recent movement in the market. She noted that property prices saw a surge in January, driven by a rush of buyers hoping to finalise purchases before the March stamp duty deadline.
She also mentioned that March witnessed a significant level of completed transactions, with Halifax recording more house sales in that month than in both January and February combined. In fact, one particular day in March became the lender’s busiest on record.
However, following this burst of activity, demand has started to settle. New mortgage applications have slowed, and as a result, prices have edged down slightly—though they remain close to record levels.
Looking ahead, Bryden highlighted several ongoing challenges for prospective buyers. Higher borrowing costs, a limited number of properties on the market, and an uncertain economic climate are all likely to continue affecting demand.
Despite these headwinds, house prices remain resilient overall, with many homeowners still benefiting from the long-term growth seen in recent years.
Across the UK, regional house price trends showed a mixed picture in March. Northern Ireland led the way with the strongest annual growth, where property prices rose by 6.6%. The average cost of a home in the region now stands at £206,620.
Scotland also saw a notable increase, with house prices climbing by 4.3%, up from 3.8% the previous month. The average property there is now valued at £213,750. Meanwhile, in Wales, prices increased by 3.7%, bringing the average home price to £227,332.
Yorkshire and Humberside recorded a solid performance too, with prices rising by 4.2% on the year. Homes in the region now cost an average of £215,807.
London, on the other hand, posted the slowest growth in the country. Prices in the capital edged up by just 1.1% year-on-year in March, a decline from 1.5% recorded in February. Nevertheless, London remains the most expensive region, with the average home valued at £543,370.
Commenting on the broader market trends, Alice Haine, a personal finance analyst at Bestinvest, said the quieter activity in March likely reflects a surge in transactions seen late last year. Many buyers had rushed to complete purchases ahead of stamp duty changes in a bid to avoid higher tax costs.
She pointed out that first-time buyers may be feeling the brunt of these changes, as they now not only need to save for a deposit but also face a bigger tax bill when buying a home.
Haine also noted that many potential buyers may now be rethinking their options more carefully. With the opportunity to benefit from lower stamp duty having passed, and an uncertain economic environment ahead, people are likely to be more cautious in their property decisions.
Recent data from Nationwide has revealed that house prices showed little movement during March, suggesting a slowdown in market activity.
Karen Noye, a mortgage expert at Quilter, explained that borrowing remains costly when compared to historical levels. She noted that many potential home movers chose to hold off last year due to the uncertainty within the mortgage market. While there are early signs that some of that demand is starting to return, she pointed out that it’s a cautious recovery—resulting in fluctuating monthly house price data. She also mentioned that the usual surge in activity seen in spring is noticeably subdued this year.
Adding to the uncertainty, the introduction of new tariffs could begin to unsettle potential buyers, reintroducing an element of unpredictability to the housing market.
However, there is a silver lining. Swap rates—which play a key role in determining fixed-rate mortgage pricing—have recently fallen. This drop comes as financial markets speculate that more interest rate cuts could be on the horizon, aimed at boosting economic growth amidst the impact of the tariffs. As a result, mortgage affordability might see some short-term improvement.
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