Average house prices fell by 0.5% in March, according to the latest Halifax House Price Index, following a smaller monthly decline of 0.2% in February.
The average property price stood at £296,699, down from £298,274 the previous month.
Despite the monthly dip, the annual rate of house price growth remained steady at 2.8%.
Regionally, Northern Ireland recorded the strongest annual growth, with property prices rising by 6.6%.
Amanda Bryden, head of mortgages at Halifax, said: “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.
“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.”
She continued: “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.”
Bryden added that while buyers continue to face challenges such as elevated borrowing costs, a tight supply of homes, and ongoing economic uncertainty, there are reasons for cautious optimism.
She concluded: “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.”
Reaction:
Nathan Emerson, CEO of Propertymark comments:
“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.
“However, with housing playing a vital role in the UK economy, international events could jeopardise the Bank of England’s target of a 2% 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.”
Iain McKenzie, CEO of The Guild of Property Professionals:
“It’s encouraging to see the market finding a more stable footing.
“While the headline ‘stabilisation’ might sound muted, beneath the surface, the market fundamentals remain remarkably resilient.
“The transaction levels we saw in the first quarter demonstrate persistent buyer appetite, particularly as stamp duty deadlines spurred activity.
“Crucially, demand hasn’t evaporated; it’s shifting, with renewed interest in larger family homes driving steady underlying price growth in that segment, even as overall headline growth moderates.
“Yes, the economic backdrop with sticky inflation and revised growth forecasts requires vigilance, and the surge in supply creates a competitive landscape.
“However, this increased choice is actually healthy, preventing overheating and providing opportunities.
“Mortgage approvals holding strong year-on-year signals continued intent. We anticipate sales volumes adjusting towards their long-term average in 2025, suggesting a sustainable market rather than a boom or bust scenario.
“Stability, coupled with robust activity, is precisely the environment where experienced agents can guide buyers and sellers effectively.”
Gareth Samples, CEO of The Property Franchise Group:
“The stabilisation of house prices reflects a maturing market, where increased supply and steady demand are creating a more balanced environment for buyers and sellers alike.
“With competition at its highest level in a decade and more homes available than in recent years, buyers have greater negotiating power, leading to price sensitivity.
“However, the sustained level of transactions and mortgage approvals signals continued confidence in the housing market.
“As interest rates remain stable and economic conditions evolve, we anticipate a measured yet positive trajectory for the market throughout 2025.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts:
“Property prices are being held in check due to affordability constraints and cautious buyer sentiment.
“Prices are unlikely to fall in prime areas where there is limited stock, but equally prices won’t rise until mortgage rates are deemed to be more ‘affordable’ again.
“The Stamp Duty concession encouraged buyers to bring forward transactions, with a flurry of activity in the first quarter.
“Now that is behind us, it will be interesting to see the reaction.
“On the ground, well-priced and well-presented homes continue to sell relatively quickly; while buyers may be pausing to assess financial implications before taking the plunge, high-demand areas are retaining interest.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“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 5-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.”
Karen Noye, mortgage expert at Quilter:
“The housing market’s resilience is wavering with a second monthly decline in prices.
“Borrowing still remains expensive by historic standards. Many would-be movers paused plans last year due to volatility in the mortgage market, and we are now seeing signs of that demand returning – albeit cautiously, resulting in volatile monthly house price indices.
“But the traditional spring bounce appears to be more muted than usual.
“Adding to this, the news of tariffs might start to spook would be buyers as once again unpredictability seeps into the market.
“But, at present swap rates which dictate fixed rate mortgage deals have tumbled as traders speculate that there could now be further rate cuts to fuel economic growth in the face of the impact of the tariffs. Affordability therefore could improve at least in the near term.
“The recent changes to Stamp Duty Land Tax, effective from April 1st, have also influenced buyer behaviour.
“The reduction of the nil rate threshold from £250,000 to £125,000 means that more buyers are now subject to stamp duty charges.
“First-time buyers are particularly affected, with their threshold decreasing from £425,000 to £300,000.
“These adjustments have led to a flurry of activity as buyers aimed to complete purchases before the deadline, but by March, it would have been too late reducing demand and driving down prices.
“We may see a continued short-term dip in transactions as the market adjusts to the new tax landscape with house prices dropping slightly too.
“The enduring supply constraints continue to prop up prices avoiding big drops, but the market’s trajectory will depend on how the UK economy is impacted by the new policies coming from the United States.”
Jason Tebb, president of OnTheMarket:
“The housing market continues to shake off external economic concerns demonstrating remarkable resilience, with good levels of activity and interest, particularly ahead of the end of the Stamp Duty concession.
“Recent base rate cuts have done much to provide a boost to confidence and activity in the market.
“With the Stamp Duty savings now behind us, further rate reductions from the Bank of England would be timely, providing much-needed impetus as the year progresses.
“The relative steadiness of house prices suggests that affordability is keeping a lid on values withbuyers not prepared to pay inflated amounts.
“Sellers keen to take advantage of what is traditionally a busy spring market should seek advice from an experienced agent to take into account local market nuances and price accordingly if they wish to achieve a timely sale.”
Jonathan Handford, managing director at national estate agent group Fine & Country:
“House prices dipped in March, reflecting a market adjusting to economic shifts and tax policy changes.
“As the April deadline for Stamp Duty changes loomed, many buyers rushed to complete purchases to avoid higher taxes, but the timing caused a softening of prices month-on month.
“With the Stamp Duty relief threshold for first-time buyers dropping from £425,000 to £300,000, March marked the closing of a key window of opportunity — sparking what some dubbed the ‘awful April’ rush, as buyers scrambled to avoid higher Stamp Duty costs.
“Adding to the cautious sentiment, inflation unexpectedly dropped to 2.8%, offering a glimmer of hope that cost-of-living pressures may ease.
“Although the Bank of England held interest rates at 4.5% in March, some experts are now anticipating the possibility of further rate cuts due to falling inflation and global economic challenges, such as new US trade tariffs.
“This could see lenders start offering slightly lower fixed-rate mortgage deals.
“For first-time buyers, the combination of falling inflation, more stable borrowing conditions, and the urgency around tax changes created a brief window of opportunity.
“However, affordability remains a challenge, particularly in higher-priced areas, and the rise in the Stamp Duty threshold will only make it more difficult.
“While March saw a dip in house prices, demand may temper post-deadline.
“However, with spring being a traditionally busier period for sales, there’s potential for activity to pick up, particularly if expectations for interest rate cuts continue to grow.”
Gareth Lewis, managing director of specialist lender MT Finance:
“The housing market needs some stimulus as even with the better weather, the flurry of activity one would expect in spring time is being dampened by the national insurance hikes and having to pay more for everything.
“We have been seeing marginal uplifts in pricing on relatively small volumes of transactions; now we are seeing marginal decreases on larger volumes of transactions.
“Buyers are pushing harder to get a better deal even if it is just marginal, particularly those who are going to pay higher Stamp Duty because they were too late to meet the deadline.
“Many will try and renegotiate as the month progresses but their success is likely to vary from transaction to transaction.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“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.
“However, worries about short-and-longer term economic prospects both here and abroad, have been driving that decision-making (or lack of it) over the past few weeks at least.”
Jonathan Hopper, CEO of Garrington Property Finders:
“With the brief period of supercharged Stamp Duty-related sales over, the average pace of price rises is coasting in neutral.
“March’s slight dip in average prices is more likely to be a return to business as usual than the start of a major slide, but it does reflect two things; with buyers no longer racing to meet the Stamp Duty deadline, demand has become more measured, and the surfeit of supply in some areas is keeping a lid firmly on price rises.
“The price-sensitivity of many buyers is leading many to focus their attention on areas where value is perceived as better. This is why average prices in Scotland are rising four times faster than those in London; in Northern Ireland they’re growing six times faster than in the capital.
“In coming months, prices will be determined by how the market reacts to the conventional forces of supply and demand, and how Donald Trump’s rewriting of the global order plays out.
“With many economists predicting that the President’s tariffs will unleash a recessionary storm on the UK and much of the world, buyer demand could cool and push property prices down.
“But at the same time, that threat of recession has increased the likelihood that mortgage interest rates will fall further and faster than previously thought.
“With many lenders set to cut the cost of borrowing this week, and the Bank of England likely to cut the base rate up to three times this year, cheaper mortgages will allow buyers to afford more and support average prices.
“The market is at a turning point, and with so many properties coming up for sale, sellers need to price their homes carefully or risk seeing them stuck unsold on the shelf.”
