Annually, house price growth slowed from 1.2% in February to 0.8% in March, according to the Halifax House Price Index. The average UK property price now stands at £299,677.
North/South divide
Homeowners living in Northern regions are seeing stronger house price growth than those in the South. The North East saw prices rise 5% over the year to £184,119, while the North West recorded annual growth of 3.1%, with the average home now costing £247,442.
By contrast, the South East led declines, with prices down 1.9% year-on-year to £383,573, while London saw average values fall by 1.2% to £536,751.
Northern Ireland continued to lead UK annual house price growth, with average prices up 8.7% over the past year to £224,809. Scotland also recorded strong growth, rising 4.4% annually to an average price of £222,716.
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Wales saw a more modest increase of 1.6% on annual basis, taking the typical home value to £230,909.
Amanda Bryden, head of mortgages at Halifax, said: “The recent slowdown in the housing market reflects the wide uncertainty regarding the conflict in the Middle East. Concerns about higher energy prices have pushed up inflation expectations, which in turn led to a rise in mortgage rates, reducing confidence that interest rates will be cut this year and dampening the initial momentum in the market seen at the start of the year.
“The effect on house prices will largely depend on how long‑lasting these pressures prove to be and the wider implications for the economy and unemployment. Mortgage rates are a key factor for buyers, particularly those getting on the ladder for the first time, who are already balancing the challenge of saving a deposit with the cost of borrowing.
“As a result, many are likely to watch movements in mortgage rates closely, before making a decision on any home purchase.”
According to Moneyfacts, average two-year fixed mortgage rates rose from 4.83% at the start of March to 5.9% by 8 April. On average, five-year fixed rates have risen from 4.95% to 5.78% over the same period, marking the highest point for five-year fixed rates since November 2023, when they reached 5.86%.
Bryden added that the recent increase in UK mortgage rates has been more modest than the sharp rises seen during the mini Budget of 2022.
Jeremy Leaf, North London estate agent and a former Royal Institution of Chartered Surveyors (RICS) residential chair, said: “Activity picked up encouragingly earlier this year but was stopped in its tracks when it became apparent that fallout from war in the Middle East would be more long-lasting than previously feared.
“Many buyers have been supported by mortgage offers obtained before hostilities started, so have been able to take advantage of sellers’ lower expectations. This survey from the country’s largest lender confirms what we have seen on the ground – that some of the less-committed have paused while the more serious are negotiating hard, so we are only seeing a wobble not a more serious dip in prices.
“However, even if the conflict ends soon, inflation and mortgage rates driven up by oil price rises are likely to persist for a while at least.”
