UK house prices continued their steady growth in March, rising 3.9% year-on-year, unchanged from February, according to the latest data from Nationwide Building Society released yesterday.
On a monthly basis, prices remained flat after seasonal adjustments, as the market adapts to the recent end of the Stamp Duty holiday.
Robert Gardner, Nationwide’s Chief Economist, pointed out that the subdued price movement was expected, as many homebuyers had accelerated their purchases to avoid the 1 April stamp duty changes.
“The market is likely to remain somewhat subdued in the coming months since activity was brought forward to sidestep additional tax obligations,” he said, adding that it was a trend Nationwide typically see after the conclusion of stamp duty holidays.”
GRADUAL RECOVERY
Despite this, Gardner anticipated a gradual recovery over the summer, driven by a strong labour market, rising real incomes and the potential for lower borrowing costs if the Bank of England moves to cut interest rates later this year.
NORTHERN DRIVE
Nationwide’s quarterly regional index for Q1 2025 also again highlighted the stark north-south divide in house price growth.
Northern Ireland recorded the strongest regional increase, with prices rising 13.5% year-on-year to an average of £205,796 – its fastest rate since 2021.
Across England, house prices rose by 3.3% annually, with the North outpacing the South. Northern England saw a 4.9% increase, led by the North West, where values climbed 5.9% to an average of £221,896.
In contrast, Southern England saw more moderate growth of 2.5%. The Outer South East led with a 3% increase, while London lagged as the UK’s weakest-performing area, with prices rising just 1.9% year-on-year to an average of £529,369.
Scotland and Wales also saw positive growth, at 3.9% and 3.6% respectively, with average prices reaching £186,131 and £209,839.
PROPERTY PERFORMANCE
Among property types, semi-detached homes recorded the highest price growth, rising 4.8% over the past year. Detached homes followed closely at 4.5%, while terraced houses increased by 4.1%.
Flats experienced the slowest growth at 2.3%, a decline from the previous quarter’s pace, reflecting a broader trend in recent years.
MARKET OUTLOOK
The average UK house price in Q1 2025 stood at £270,867, with a quarterly increase of 1.2% after seasonal adjustments.
Gardner remains optimistic about market conditions despite global economic uncertainties.
And he said: “The unemployment rate is low, earnings are rising at a healthy pace in real terms, household balance sheets remain strong, and borrowing costs may ease further if the Bank of England lowers rates in the coming quarters.”
INDUSTRY REACTION
Jean Jameson, Chief Sales Office for Foxtons, says: “The property market posted a strong performance in Q1 as the momentum seen throughout 2024 continued into 2025.
“Whilst this week’s stamp duty deadline has influenced the market to an extent, it’s the recent reductions to interest rates and the resulting improvements to mortgage affordability that have been a far greater motivator for homebuyers entering the market in 2025.
“As a result, we don’t anticipate today’s changes to stamp duty relief thresholds to have any detrimental impact on current market sentiment going forward and we expect to see house prices continue to strengthen as the year progresses, buoyed by the prospect of further interest rate reductions.”
STRONG SUPPLY
Tom Bill, Head of UK Residential Research at Knight Frank, says: “House prices were supported by the stamp duty deadline in the first quarter of the year but we expect a dip in activity as demand effectively resets from April.
“Buyers coming back into the market with a re-levelled playing field will find that supply is strong, which should keep downwards pressure on prices.
“Activity should recover by the summer but borrowing costs could be held higher for longer by erratic US trade policy and the inflationary impact of measures like the employer national insurance changes.”
BUYER DEMAND
Iain McKenzie, Chief Execuitve of The Guild of Property Professionals, comments: “The latest Nationwide HPI data confirms what we’ve seen in recent months – a market buoyed by strong buyer demand, increased sales activity, and an influx of new listings.
“The surge in transactions ahead of the stamp duty changes has undeniably driven momentum, supporting steady price growth.
“While some may have hoped for a last-minute policy shift, the new stamp duty thresholds are now in effect. Naturally, we expect a period of adjustment as buyers and sellers recalibrate their plans. However, with improving mortgage rates and continued earnings growth, the market remains well-placed for stability.
“The resilience of the housing sector is clear, and we anticipate continued good levels of activity throughout the year. The focus now must be on ensuring a balanced and sustainable market that supports buyers and sellers alike.”
RELIABLE SNAPSHOT
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Latest figures from this consistently reliable snapshot of housing market activity reinforces what we have seen on the ground – the overwhelming majority of buyers and sellers who had decided to move are coming to terms with the loss of the stamp duty saving by trying to split higher costs between them.
“As a result, and with many sales brought forward, there will inevitably be fewer but more protracted transactions over the next few months. However, bearing in mind around a third of total annual stock is made available during March, April and May, prices are likely to soften, rather than correct, while that underlying strength and confidence in the market remains.”
FIRST-TIME BUYER RUSH
Matt Thompson, head of sales at Chestertons, says: “Despite the rush of first-time buyers entering the market to beat the stamp duty deadline having slowed down, sellers anticipate a busy spring market.
“We have seen an increasing number of homeowners listing their property for sale in March which is currently creating a greater choice for house hunters. Still, with London having one of the most competitive property markets in the world, buyers are required to act fast and start their search as early as possible.”
MARKET MOMENTUM
Nathan Emerson, Chief Executive of Propertymark, says: “The housing market has witnessed an extremely encouraging start to the year with sustained house price growth year on year.
“Although we now sit at the very start of the amended stamp duty thresholds for people across England and Northen Ireland, we remain optimistic to see strong market momentum across the entire UK, as we head towards the traditionally busy summer months.
“Although we are still seeing fluctuations within the rate of inflation, and a much-needed cautious approach from the Bank of England regarding base rates, we are starting to see enormously welcome sub 4% mortgage deals offered by some lenders.
“As we hopefully witness potentially further base rate cuts across the year, it would be encouraging to see this translate into yet more competitive mortgage products being widely offered.”
AFFORDABILITY CONCERNS
Jonathan Handford, Managing Director at national estate agent group Fine & Country, says: “House prices remained stable in March, extending the trend seen over recent months.
“It’s no surprise that this stability persists, as homebuyers rushed to complete purchases before the April tax changes took effect, particularly the reduction in the stamp duty threshold.
“However, with this key deadline now passed, attention turns to whether the market can sustain its current momentum or if we will see a price dip in the following months.
“Despite inflation unexpectedly falling to 2.8% in February, and the Bank of England’s decision to lower interest rates to 4.5%, affordability concerns remain a barrier for many prospective buyers. With inflation still above the Government’s 2% target, the base rate remained unchanged in March — dashing hopes for a further cut.
“Even with improved borrowing conditions, households are still exercising caution in the face of broader economic pressures.”
“The latest figures from the Bank of England show that mortgage approvals for house purchases declined again in February, while consumer credit borrowing growth also slowed. This suggests that even with improved borrowing conditions, households are still exercising caution in the face of broader economic pressures.
“As the market readjusts, buyer activity may ease in the coming months, potentially leading to a cooling of house price growth. However, seasonal trends could provide some support, as spring typically sees an uptick in homebuying activity.”
INDUCEMENTS VITAL
Jason Tebb, President of OnTheMarket, says: “The housing market continues its strong start to the year as buyers and sellers brought forward transactions to take advantage of the stamp duty concession.
“With that incentive no longer available, other inducements – such as interest rate reductions – are more vital than ever. Two quarter-point base-rate cuts in the second half of last year, followed by one so far this year, have noticeably boosted sentiment and transactions.
“Affordability is an ongoing concern with rates still higher than many borrowers have grown used to, combined with the high cost of living and other pressures.
“With the markets expecting further rate reductions this year, this should give buyers who require mortgages increased confidence about taking the plunge.
“As more stock comes to market in order to take advantage of the traditionally busy spring market, values not running away with themselves. Buyers are sensitive on price and keen to negotiate, so sellers should seek advice and price accordingly, particularly as there are significant regional variations.”
NORMAL MARKET
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “Property prices are being held in check due to affordability constraints, higher mortgage rates and cautious buyer sentiment.
“The stamp duty concession focused the minds of buyers, encouraging them to bring forward transactions. Higher borrowing costs and affordability pressures remain an issue and it will be interesting to see the reaction in the second quarter of the year with the concession no longer available.
“The approaching end of the stamp duty holiday brought a flurry of activity, which is being replaced with buyer demand for houses in the £1m to £2m range, as we would expect at this time of year in a more ’normal’ market.”
RATE CUTS
Mark Harris, Chief Executive of mortgage broker SPF Private Clients, says: “March has been a busy month for the housing market as one would expect but particularly so this year ahead of the window to make stamp duty savings closing.
“It was disappointing not to see an extension of this in the Chancellor’s Spring Statement or another alternative to support first-time buyers.
“Part of the additional cost is likely to be absorbed into house prices and form part of the negotiation process between vendors and buyers.
“Some incentive or inducement to get first-time buyers (and others) to come to market would give transaction numbers a boost, which are so vital for the overall health of the market. Further rate cuts would be welcome although the pace that which they are coming has unfortunately slowed.”
LANDLORD HELP
Gareth Lewis, managing director of specialist lender MT Finance, says: “The Nationwide figures are unsurprising as even though the stamp duty holiday has helped the market, it is still quite soft out there.
“Buyers are looking to get a deal on a property and the market is still a bit sluggish in terms of getting sales through.
“Those properties that people want to buy are in limited number and accordingly are priced at a premium while those in less desirable locations are sitting for a while because they are caught up in inflated pricing.
“It doesn’t help that there is no stimulus from buy-to-let investors either. Those landlords would normally buy smaller family homes which are easily rentable, and if they are not operating to the same degree in terms of purchasing, then there is a lack of stimulus for the wider housing market.
“This whole clamour to make it easier for people to buy a property is actually making it harder.”
