Average UK house price fell by about £2,900 in March, says Halifax

The average UK house price fell by about £2,900 month on month in March, according to an index.

Halifax said the typical property value fell by 1.0% month on month, after a rise of 0.3% in February.

Property prices increased by 0.3% annually in March, slowing from an increase of 1.6% in February.

Halifax house price index: year-on-year change in average UK house price
(PA Graphics)

“That a monthly fall should occur following five consecutive months of growth is not entirely unexpected, particularly in view of the reset the market has been going through since interest rates began to rise sharply in 2022.

“Despite this, house prices have shown surprising resilience in the face of significantly higher borrowing costs.

“Affordability constraints continue to be a challenge for prospective buyers while existing homeowners on cheaper fixed-term deals are yet to feel the full effect of higher interest rates.

“This means the housing market is still to fully adjust, with sellers likely to be pricing their properties accordingly.”

“Looking ahead, that trend is likely to continue. Underlying demand is positive, as greater numbers of people buy homes, demonstrated by recent rises in mortgage approvals across the industry and underpinned by a strong labour market.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “While the flurry of mortgage rate reductions at the start of the year has slowed, pricing is still considerably cheaper than it was a year ago.

“Assuming inflation continues to fall towards its 2% target, the first interest rate reduction could come as early as the summer, which will further boost confidence and activity.”

Tom Bill, head of UK residential research at estate agent Knight Frank, said: “Since November, 10 weeks of recovery in the UK housing market have been followed by 10 weeks of drift.

“Mixed signals around inflation, rising supply and a wave of people rolling off sub-2% fixed-rate mortgages agreed in early 2022 mean the direction of travel for the property market is currently sideways.

“Once a rate cut appears firmly on the horizon and more mortgage rates start with a three, we expect stronger demand to push UK prices 3% higher this year.”

Andrew Montlake, managing director of Coreco mortgage brokers said: “House prices can be fickle, but after several months of rises it was no surprise that house prices finally fell slightly, reflecting tougher economic conditions and the fact that interest rates have not yet eased significantly.

“Over the past 12 months house prices have however proved to be remarkably resilient, and despite this monthly fall, there is a tidal surge of pent-up demand waiting to break the dam at the first sign that interest rates are finally reducing.”

Martin Beck, chief economic adviser to the EY Item Club, said: “The EY Item Club thinks March’s weakness in values will prove only a temporary interruption to a gradual rebound in property prices.

“Falling inflation and still-strong pay growth mean real wages are rising again, unemployment is very low, consumer sentiment has picked up and quoted mortgage rates are significantly down on the peaks of summer 2023.”

Jason Tebb, president of OnTheMarket, said: “Activity continues to pick up with more inquiries and stock coming to market, as you would expect at this time of year.”

“We have already seen this trend beginning to reverse and expect to see improving house prices in the months ahead.”

Nathan Emerson chief executive at property professionals’ body Propertymark said: “Spring tends to be one of the busiest times of the year for the housing market and, with inflation falling and interest rates remaining static, homebuyers have adjusted to the latest market conditions.

“This should result in a surge of new buyers, sellers, and properties coming to the market as the year progresses.”

Iain McKenzie, chief executive of the Guild of Property Professionals, said: “Buyers typically prefer to move during the warmer months, and in turn, this will increase competition and bolster house prices.”

– Here are average house prices and the annual change, according to Halifax. Regional annual change figures are based on the most recent three months of approved mortgage transaction data: 

East Midlands £239,954, 0.1%

Eastern England, £330,627 minus 0.9%

London, £539,917, 0.4%

North East, £172,335, 2.5%

North West, £232,315, 3.7%

Northern Ireland, £194,743, 4.3%

Scotland, £204,835, 2.1%

South East, £385,751, minus 0.7%

South West, £302,033, minus 0.2%

Wales, £219,213, 1.9%

West Midlands, £254,116, 1.8%

Yorkshire and the Humber, £207,232, 1.7%

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