According to Nationwide’s House Price Index, there was also no monthly change in house prices after accounting for seasonal effects.
The average house price in the UK stands at £271,316, which is up from £270,493 in the prior month.
Robert Gardner, Nationwide’s chief economist, said the price trends were “unsurprising” given the end of the stamp duty holiday at the end of March.
He noted that transactions associated with mortgage approvals made in March, especially nearing the end of the month, would be “unlikely to complete before the end deadline”.
Gardner said the “market is likely to remain a little soft in the coming months” as transactions have been brought forward to avoid heightened stamp duty bills, which is typical following the end of stamp duty holidays.
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“Nevertheless, activity is likely to pick up steadily as the summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential homebuyers in the UK remain supportive.
“The unemployment rate is low, earnings are rising at a healthy pace in real terms (i.e., 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,” he said.
Northern Ireland sees highest house price growth
Nationwide said annual house price growth within UK regions was “broadly similar” to last quarter’s results. Northern Ireland had the strongest house price growth, at 13.5% – the highest level recorded since 2021.
This was followed by the North West and West Midlands, which saw around 5.9% and 5.8% annual house price growth.
London had the lowest house price growth for any region at 1.9%, with East Anglia reporting 2.1% growth and the East Midlands coming in at 2.5%. Scotland and Wales reported 3.9% and 3.6% house price growth respectively, whereas in England, growth was estimated at around 3.3%.
The report stated that the North/South divide in house prices was persistent, with prices in Northern England – made up of the North, North West, Yorkshire and the Humber, East Midlands and West Midlands – up 4.9%.
This compares to Southern England, made up of the South West, Outer South East, Outer Metropolitan, London and East Anglia, where house price growth was pegged at around 2.5%.
From a property type perspective, semi-detached homes have seen average prices rise over the last year by 4.8%. This compares to detached properties, which saw a 4.5% annual increase, and terraced properties, which saw a 4.1% year-on-year rise.
House price figures show ‘picture of a stalling market’
Karen Noye, mortgage expert at Quilter, said the house price figures, following the first day of new stamp duty rules, show a “picture of a stalling property market”.
She continued: “Much of this slowdown can be attributed to the stamp duty changes, which come into play today. Those who were hoping to move but did not get a sale across the line in time will now face hefty tax bills, often adding several thousand pounds to the cost of a move. With this in mind, it is no surprise that house prices stalled in March, as many will have put their plans on hold knowing the tax bill that would have awaited them.
“First-time buyers will feel the shock of the new stamp duty thresholds even more keenly, and their hard-saved deposit will now need to be topped up to account for the additional costs. These prospective buyers already face significant affordability hurdles, so this end of the market could well see limited movement in the coming months while they grow accustomed to the even higher costs of homeownership.”
She also pointed to the latest new mortgage borrowing figures from the Bank of England, showing this has fallen by £900m to £3.3bn in February, partially due to people putting home moves on hold as they had “missed the opportunity to get a sale pushed through in time”.
“Approvals for house purchases stayed flat, decreasing by just 600 to 65,500 in February. Both figures are likely to continue to fall in the next few months,” Noye added.
“There is no doubt that the housing market is already rather sluggish, and the stamp duty changes will do little to help matters. Prospective buyers may well hold out in hopes that interest rate cuts will come through, but the Bank of England is unlikely to make any significant changes in the near term,” she said.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, agreed that the “lack of growth reflects the unwinding of the recent surge in prices driven by homebuyers frantically trying to beat stamp duty threshold changes that take effect today”.
She noted that this would impact first-time buyers as well as existing homemovers looking to upsize or downsize, as they will now have to pay thousands of pounds more in tax.
“Buyers that started their property purchase this year were at risk of leaving it too late to secure the lower property tax rate, even for a straightforward purchase, due to the surge in demand for conveyancing services. Those that have missed the deadline by a whisker now face being stung with a much higher tax bill than they budgeted for, with the real risk that some deals may collapse altogether.
“Homebuyers are likely to weigh up the cost of homeownership very carefully from today. As well as rising transaction costs, they must contend with uncertainty about the wider economy as the country braces for the fallout from the triple hit to businesses this month from rising National Insurance costs, business rates and the minimum wage. Many employers plan to pass on higher costs to consumers, and with a raft of household bills going up from today – from energy to water, council tax and more – budgets are going to get stretched to the max,” she noted.
Haines said that while mortgage rates may be easing, the outlook for pricing was “uncertain”, with the base rate held in March to keep inflationary pressures at bay from Chancellor Rachel Reeves’ tax increases and US President Donald Trump’s tariff war.
“While some movers may choose to park buying plans for now while they reassess their affordability position, first-time buyers wanting to escape high rents and keen to plough ahead have options. Some mortgage providers are relaxing their lending criteria, while no-deposit mortgages are back on the table along with longer-term home loans, such as 30, 35 or even 40 years.
“Now is the time to negotiate more heavily. Listings are on the rise, and with the spring selling season now upon us, a time when more homeowners typically place properties on the market, it may be a buyer’s market once again,” she concluded.
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Annual house price growth stable at 3.9% in March – Nationwide
