UK house prices fell in March as uncertainty over the conflict in the Middle East and economic pressures weighed on buyers.
Figures from Halifax, published on Wednesday, highlighted property prices dipped 0.5% compared with February. The average home slipped below £300,000 to £299,677, after first crossing the milestone in January.
Annual growth also slowed to 0.8%, down from 1.2% the previous month.
Researchers from Halifax said uncertainty over the war in the Middle East dampened the ‘initial momentum in the market seen at the start of the year’.
Rising energy prices – a subject we have reported on previously – have pushed up inflation expectations, in turn driving up mortgage rates.
On the subject of expectations, it is believed the Bank of England could raise interest rates multiple times this year, which will impact the cost of fixed-rate mortgages. Last month, the Bank’s Monetary Policy Committee announced they were leaving rates unchanged at 3.75%.
However, City traders cut their forecasts after the US and Iran agreed a two-week ceasefire on Tuesday evening, leaving just one quarter-point rise fully priced in for 2026.
According to Halifax’s data, the choice of mortgage deals has also narrowed. Hundreds of products have been withdrawn from the market and the average two-year fixed residential mortgage rate climbed to 5.84% by the end of March – the highest since July 204.
Amanda Bryden, head of mortgages at Halifax, said: ‘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.’
Across the UK house prices continue to differ. Regional trends show Northern Ireland is leading annual house price growth, up 8.7% to £224,809, while Scotland follows with 4.4% growth to £222,716.
Meanwhile, Wales rose 1.6% to £230,909 and in England, stronger growth remains concentrated in the North, while prices fell 1.9% year-on-year in the South East and slid 1.2% in London.
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