According to Nationwide’s House Price Index (HPI), the monthly house price change was estimated at 0.5%, which compares to a drop of 0.6% in April.
The report said the average house price is £273,427, which compares to £270,752 in April.
Robert Gardner, Nationwide’s chief economist, said official data had confirmed that there was a “significant jump in residential property transactions in March, with buyers bringing forward their purchases to avoid additional stamp duty costs”.
Gardner said owner-occupier house purchase completions were around twice as high as usual and the highest since June 2021.
He noted that mortgage approval figures show that market activity “appears to be holding up well” post-stamp duty changes.
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“Despite wider economic uncertainties in the global economy, underlying conditions for potential homebuyers in the UK remain supportive.
“Unemployment remains low, earnings are rising at a healthy pace (even after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if bank rate is lowered further in the coming quarters as we, and most other analysts, expect,” Gardner said.
He added that its specialist report showed that average house price growth in rural locations continues to outpace more urban areas.
Between 2019 and 2024, house prices in rural areas rose by 23%, while in urban areas, the growth was estimated at 18%.
“The pandemic had a significant impact on housing demand during 2021 and 2022, with a shift in preferences towards more rural areas, particularly amongst older age groups. Whilst these effects have now faded, less urban areas have continued to hold the edge in terms of house price growth,” Gardner explained.
He noted that in its latest housing market survey, which looked at homeowners who moved in the last five years, around 63% of house moves were within the same type of area.
Approximately 9% of moves were from towns and cities to rural areas, and this was partially offset by 7% who moved from rural to more urban areas.
Of those that moved to a different type of area, there was variation by age group, with younger people tending to move to urban areas and older groups favouring more rural areas.
House price growth figures show market is ‘holding up’
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said the data indicates that the “market is holding up, despite an increase in purchase costs for buyers from the start of April, when stamp duty thresholds reverted to their previous, lower levels”.
She continued: “While some buyers are clearly pushing ahead with their purchase journey, others may now be mulling their options more carefully, as higher costs pose a fresh challenge. Lower stamp duty thresholds have the biggest impact on first-time buyers, as they must now save enough to cover a potentially sizeable tax bill in addition to their deposit.
“This may prompt more lenders to offer 100% mortgages to help first-timers get a foot on the ladder, particularly as a number of providers have already relaxed their affordability rules in a bid to attract more clients.”
Haine said borrowing conditions had “improved in recent months, something that may be helping to prop up the market”.
She explained: “Mortgage rates have eased on the back of four interest rate cuts from the Bank of England since last August, though there has been some volatility in the recent weeks amid shifting interest rate expectations. Sticky inflation may also slow the pace of rate cuts from here.
“This has been driven by a sharp rise in most household bills in ‘Awful April’, along with businesses passing the burden of higher employment costs on to consumers and global uncertainty prompted by US President Donald Trump’s unpredictable tariff policies’ impacts.”
Haine said that for many borrowers, home loan rates will be in a far better place than they were at the height of the mortgage crisis, but not everyone could expect a better deal when they eventually refinance.
“For almost half a million homeowners set to remortgage this year when they roll off their cheap, five-year, fixed rate deals secured when interest rates were at rock bottom, it will be time to adjust their household budget to make space for an almost inevitable jump in repayment costs.
“While the Bank of England cut interest rates in May, there is less certainty they will follow up with a fifth rate cut in June. The rate-setting Monetary Policy Committee will be keen to keep inflationary pressures at bay, not only from Chancellor Rachel Reeves’ tax hikes on businesses but also any further threats from Trump’s tariff fiasco.
“Uncertainty is becoming the new normal and for many first-time buyers or homemovers looking to refinance their existing mortgage soon, it may be better to push ahead with a purchase rather than wait for the ideal borrowing conditions. Plus, the traditional surge in listings at this time of year is a positive buyers can take advantage of, as a wider stock of homes to choose from raises the potential for heavier negotiation on price,” she noted.
