Halifax records a slight drop in prices in March, which it blames on the stamp duty threshold changes that started in April.
UK house prices fell slightly by 0.5% in March, compared to 0.2% in February, according to Halifax. The lender’s latest House Price Index revealed a slight drop. However, annual growth remains the same at 2.8%, unchanged from February. The average UK house price is now standing at £296,699, compared to £298,274 in the previous month.
‘House prices rose in January as buyers rushed to beat the March stamp duty deadline,’ says Amanda Bryden, Head of Mortgages at Halifax. ‘However, with those deals now completing, demand is returning to normal and applications slowing. 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.
Buyers facing challenges
Bryden adds: ‘Looking ahead, potential buyers still face challenges from the new normal of higher borrowing costs, a limited supply of available properties to choose from and an uncertain economic outlook.’
That said, Halifax is optimistic about the remainder of this year, with anticipated base rate cuts. ‘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,’ says Bryden.
In terms of regional differences, Northern Ireland remains the strongest location for price growth, where prices rose annually by 6.6% in March. Scotland showed the second strongest growth with prices increasing to 4.4% last month compared to 3.8% in February. London saw the slowest annual house price growth, going from 1.5% in February to 1.1% in March. The average house price in London is £543,370.