UK House Prices Experience First Monthly Decline of 2026
According to the latest Halifax house price index, the average UK property value fell by 0.5% month-on-month in March 2026. This marks the first monthly decrease this year, following increases of 0.8% in January and 0.3% in February. The average house price across the nation now stands at £299,677.
Annual Growth Slows Amid Economic Uncertainty
Annual property value growth also softened, dropping to 0.8% in March from 1.2% the previous month. Amanda Bryden, head of mortgages at Halifax, attributed this slowdown to widespread uncertainty surrounding the Middle East conflict. "Concerns about higher energy prices have pushed up inflation expectations, which in turn led to a rise in mortgage rates," she explained. "This has reduced confidence that interest rates will be cut this year and dampened the initial momentum seen at the start of the year."
Bryden noted that the recent increase in UK mortgage rates has been more modest than the sharp rises witnessed during the 2022 mini-budget. She added, "Many households will already be on fixed deals, protecting them from the latest rate rises. Taking all this into account, house prices may prove resilient, even if uncertainty weighs on market activity in the near term."
Regional Variations Highlight Diverging Markets
The report revealed significant regional disparities in house price performance:
- Northern Ireland led UK annual growth with an impressive 8.7% increase, bringing average prices to £224,809.
- Scotland recorded strong growth of 4.4%, with average house prices reaching £222,716.
- Wales saw a more modest 1.6% annual increase, taking typical home values to £230,909.
- In England, stronger price growth remained concentrated in northern regions, with the North East showing 5% annual growth (£184,119) and the North West recording 3.1% (£247,442).
Conversely, several regions experienced price declines:
- London saw a 1.2% annual decrease to £536,751
- The South East fell 1.9% to £383,573
- The South West dropped 0.6% to £301,859
- The East Midlands declined 0.6% to £333,455
Industry Experts Weigh In on Market Outlook
Tom Bill, head of UK residential research at Knight Frank, commented on mortgage rate dynamics: "What goes up must come down, but for mortgage rates the drop will be more gradual than the sharp increase triggered by the Middle East conflict, even if the two-week ceasefire deal holds." He warned that longer-term inflationary impacts "means mortgage rates won't snap back to where they were in February. This will keep demand and house prices in check this year."
Karen Noye, a mortgage expert at wealth manager Quilter, highlighted the delayed impact of mortgage cost changes: "Changes in mortgage costs do not feed through to house prices immediately, so any meaningful shift in price momentum linked to the recent rise in borrowing costs is likely to emerge from this point onwards." She advised households with mortgages due to mature later this year to secure rates early for certainty in an unpredictable market.
Nathan Emerson, CEO of Propertymark, noted the shifting landscape: "We started the year with positivity... However, a lot has changed in a short space of time, with numerous sub-4% mortgage deals being withdrawn over the last few weeks as the wider economy adjusts to potential uncertainties."
Despite these challenges, some industry figures remain cautiously optimistic. Amy Reynolds, head of sales at London-based estate agency Antony Roberts, observed that "the underlying market remains robust," with serious buyers still active and sales being agreed at typical seasonal levels. Iain McKenzie, CEO of The Guild of Property Professionals, similarly reported that "sales agreed remain relatively stable."
The Halifax index provides a comprehensive snapshot of a housing market navigating geopolitical tensions, inflationary pressures, and shifting mortgage rate expectations. While near-term uncertainty may weigh on activity, structural factors including fixed-rate mortgage protections could support price resilience in the coming months.
