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    Home»Property»UK house prices fall by £1,575 in March as stamp duty holiday ends
    Property

    UK house prices fall by £1,575 in March as stamp duty holiday ends

    April 6, 20255 Mins Read


    UK house prices fell in March, according to Halifax, reflecting a cooling in the market as the stamp duty tax break comes to an end.

    The average UK house price registered a 0.5% dip from the previous month, or £1,575 in cash terms, leaving the average cost of a home at £296,699, according to the lender. Prices were up 2.8% from March last year, unchanged from the annual rate in February.

    Amanda Bryden, head of Mortgages at Halifax, said: “House prices rose in January as buyers rushed to beat the March stamp duty deadline. However, with those deals now completing, demand is returning to normal and new 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.

    “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.”

    Read more: What Trump’s tariffs could mean for UK mortgage rates

    Regionally, Northern Ireland saw the most substantial annual growth, with prices rising 6.6% in March — the average house there now costs £206,620.

    Scotland followed closely, with a 4.3% price rise from 3.8% in February. The average price in Scotland is now £213,750.

    Wales saw a 3.7% increase in prices to an average of £227,332.

    Yorkshire and Humberside recorded a solid 4.2% annual increase, with properties now costing an average of £215,807.

    London, however, experienced the slowest growth, with prices rising only 1.1% year-on-year in March, down from 1.5% in February. Despite this, the capital still boasts the highest average house price in the UK, at £543,370.

    Alice Haine, a personal finance analyst at Bestinvest, said: “The more subdued activity in March follows a surge in demand at the end of last year when buyers raced to get deals across the line in a bid to avoid a heavier tax bill.

    “First-time buyers are likely to be stung the most by the stamp duty threshold changes as they now not only need to raise a deposit but must also find extra cash to fund a higher tax bill.

    “Homebuyers are likely to be reassessing their options much more carefully now, as they have not only missed the boat to secure lower property tax charges but must also contend with a very uncertain economic outlook.

    “Affordability levels may have improved slightly thanks to easing mortgage rates – a result of three interest rate cuts since August last year – along with resilient wage growth, but April is proving to be a challenging month.”

    Haine noted that April marks the end of the stamp duty holiday, the start of higher national insurance payments, and a higher minimum wage. She warned that the combined pressure of rising household bills, increased taxes, and frozen personal tax thresholds could affect the property market.

    The stamp duty pause, introduced in September 2022, when mortgage rates were rapidly rising, ended in March. First-time buyers completing purchases from 1 April pay the levy on properties of £300,000 or more, rather than £425,000 previously, with similar changes for non-first-time buyers.

    Read more: How higher house prices are impacting young people’s finances

    Nathan Emerson, CEO of Propertymark, said: “This house price reduction will be a huge disappointment to many sellers hoping to make gains on a house sale to climb up the housing ladder, but it could also be an opportunity for aspiring homeowners to take advantage of the slight reduction in house prices and take their first step, or next step, onto the housing ladder.

    “Hopefully, this month-on-month dip is only temporary. The spring and summer months normally spur on a flurry in housing activity, especially at a time when there are many competitive mortgage deals out there right now as a result of the reduction in interest rates last year.

    “However, with housing playing a vital role in the UK economy, international events could jeopardise the Bank of England’s target of a 2% inflation rate, which may thwart their ambitions to reduce interest rates further.

    “The housing market must remain stable ahead of the Bank of England’s next decision on interest rates in May.”

    Figures published last week by the lender Nationwide showed house prices stalled in March.

    Karen Noye, mortgage expert at Quilter, said: “Borrowing still remains expensive by historic standards. Many would-be movers paused plans last year due to volatility in the mortgage market, and we are now seeing signs of that demand returning — albeit cautiously, resulting in volatile monthly house price indices. But the traditional spring bounce appears to be more muted than usual.

    “Adding to this, the news of tariffs might start to spook would be buyers as once again unpredictability seeps into the market.

    “But, at present swap rates which dictate fixed rate mortgage deals have tumbled as traders speculate that there could now be further rate cuts to fuel economic growth in the face of the impact of the tariffs. Affordability therefore could improve at least in the near term.”

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