UK house prices were static in March, signaling a slowing market and buyer caution amid uncertainty over interest rates, according to the Office for National Statistics (ONS). The average house price across the UK stood at £268,000, unchanged from February, marking the lowest annual inflation rate in nearly two years at 1.7%, down from 1.7% in February.
Regional Variations
Price movements varied across the UK. In England, average prices fell by 0.6% annually to £290,000. Wales saw a 2.9% rise to £213,000, while Scotland experienced a 1.6% increase to £187,000. Northern Ireland recorded a 7.4% jump in the three months to March, reaching £198,000. London suffered the steepest decline, with values dropping 2.1% year-on-year, marking the eighth consecutive month of falling prices in the capital.
Impact of Global Events
Ian Futcher, financial planner at Quilter, noted that March was the first full month following the Iran war, which injected global uncertainty into markets. Mortgage rates initially spiked, with hundreds of deals withdrawn, before partially recovering as calm returned. However, interest rates remain at 3.75%, with the Bank of England assessing the war's impact on inflation, and some economists anticipate a rate hike later this year.
Futcher added: "Expectations around interest rates have shifted, pushing mortgage pricing higher. The risk is that recent transactions face a tougher affordability backdrop, pointing to continued pressure on activity and pricing, especially in high-value markets like London."
Market Outlook
Nathan Emerson, chief executive of Propertymark, commented: "Static house prices indicate a market stabilizing after prolonged economic uncertainty and higher borrowing costs. Buyers are negotiating carefully, focusing on value and monthly mortgage costs. Stability may rebuild confidence, particularly among first-time buyers awaiting mortgage rate certainty."
