The latest Halifax House Price Index shows a slight cooling in the housing market, with prices falling in March and annual growth easing as economic uncertainty impacts buyer confidence.
UK house prices saw a modest decline in March, signalling a slowdown in market momentum as wider economic pressures begin to weigh on activity.
According to the latest Halifax House Price Index, average property prices fell by 0.5% in March, following a small rise of 0.3% in February. The typical UK home is now valued at £299,677.
Annual house price growth has also softened, dropping to 0.8%, down from 1.2% the previous month, suggesting the market is losing pace in the spring.
Economic uncertainty
Halifax points to increasing economic uncertainty as a key factor behind the slowdown.
“The recent slowdown in the housing market reflects the wide uncertainty regarding the conflict in the Middle East,”
says Amanda Bryden, Head of Mortgages at Halifax.
“Concerns about higher energy prices have pushed up inflation expectations, which in turn led to a rise in mortgage rates, reducing confidence that interest rates will be cut this year and dampening the initial momentum in the market seen at the start of the year.”
“The effect on house prices will largely depend on how long‑lasting these pressures prove to be and the wider implications for the economy and unemployment. Mortgage rates are a key factor for buyers, particularly those getting on the ladder for the first time, who are already balancing the challenge of saving a deposit, with the cost of borrowing.”
Regional differences
The picture across the UK remains mixed. Northern regions continue to show stronger growth, with Northern Ireland leading annual price increases at 8.7%, while the North East recorded 5% growth. In contrast, southern areas have seen prices ease, with London down 1.2% and the South East falling 1.9% year-on-year.
There are also signs of reduced activity in the market. Buyer enquiries and agreed sales have declined, reflecting a more cautious approach from buyers, while mortgage approvals have risen slightly but remain below the levels in 2025.
Stable house prices
MB Associates’ Sales & Operations Director, Les Pick, says:
“Across the first quarter of 2026, house prices in Surrey have remained relatively stable, typically ranging between £600,000 and £725,000 depending on the area and property type, with any recent softening already absorbed over previous months rather than driven by a sudden dip.”
Les adds:
“What we’re seeing now is a more cautious, price-sensitive market, influenced in part by wider geopolitical uncertainty, alongside a growing focus on mortgage affordability as buyers respond to ongoing rate fluctuations. Accurate pricing has become critical, with overvalued homes quickly adjusted, and this reflects a broader trend across the South East where the market is normalising rather than declining. If mortgage rates begin to stabilise, confidence could return quickly, but for now the market is being shaped by realism and affordability rather than momentum.”
Future of the housing market
Looking ahead, house prices are expected to remain relatively resilient, but much will depend on how long current economic pressures persist and the future direction of mortgage rates. For buyers and homeowners alike, keeping a close eye on borrowing costs will be key in the months ahead.