UK house price growth stalled in March as higher mortgage rates and affordability pressures continued weighing on the market, while private rents pushed higher again across much of the country.

Latest Office for National Statistics data showed average UK house prices were unchanged annually in March 2026, leaving the average property value at £268,000. ONS Private rent and house prices UK May 2026

The flat annual reading marked a sharp slowdown from the 1.7% growth recorded in February and reflects increasing pressure on buyer affordability following recent mortgage rate rises and wider economic uncertainty.

ONS said the slowdown was largely driven by a 0.4% monthly fall in UK house prices between February and March, compared to a strong 1.2% monthly increase recorded during the same period last year ahead of the April 2025 Stamp Duty changes in England and Northern Ireland. ONS Private rent and house prices UK May 2026

REGIONAL DIFFERENCES

Average house prices in England fell by 0.6% annually to £290,000, while Wales recorded 2.9% growth with average values reaching £213,000.

Scotland continued to outperform much of the UK market, posting annual growth of 1.6% with average prices rising to £187,000.

The latest figures reinforce a growing north-south divide emerging across the property market as higher borrowing costs continue hitting affordability hardest in southern England.

At the same time, rental inflation continued to accelerate.

Average UK private rents rose by 3.5% annually in April to £1,381 per calendar month, slightly up from 3.4% growth recorded in March.

In England, rents increased by 3.5% to an average of £1,438, while Wales saw the strongest annual rental growth at 4.9%.

Scottish rents increased by 2% annually to £1,019.

Within England, the North East recorded the highest rental inflation at 6.5%, while London saw the weakest growth at 2%.

INDUSTRY REACTION

Louisa Sedgwick, managing director of mortgages at Paragon Bank, said: “Rent inflation has historically tracked wage inflation and we have seen this relationship harmonise in the past year following the severe upwards pressure on rents in the post-Covid era.

“The conflict in Iran is building some further inflationary pressure into the economy and that will likely to be reflected in the rental market in the coming months.

“Landlords are not immune to cost pressures and 72% of those planning to increase rent in the next year will do so because of the rising costs they face in operating their business, with six in 10 citing a higher tax burden following the 2025 Autumn Budget.

 “Rising mortgage rates are often claimed to be a driver of rental inflation, but less than 40% of rental properties are mortgaged, with the vast majority of those subject to a fixed-rate mortgage, so the impact of mortgage rates increasing is unlikely to be felt across the broader rental sector.”

LANDLORD STRATEGY

Alex Upton, managing director, specialist mortgages and bridging finance, Hampshire Trust Bank, said: “Landlord strategy is continuing to change.

“We’re having far fewer conversations about expansion for the sake of growth, particularly as the Renters’ Rights Act starts feeding into longer-term investment decisions.

“Investors are looking much more closely at which properties still work financially, where income is more resilient and how portfolios need to evolve over the next few years.

“What brokers and landlords need now is consistency. Where funding remains accessible and lenders continue to engage with more complex cases, confidence stays in the market and investment activity continues. That matters, because over time, confidence and availability play a major role in shaping the overall direction of the rental market.”

BUDGET UNCERTAINTY

Richard Donnell, executive director of research at Zoopla, said: “The ONS index shows house price inflation has stalled – this is a as result of Budget uncertainty over the taxation of housing in the latter part of 2025 as it’s too early for the higher mortgage rates of recent weeks to hit price changes this quickly.

“Looking ahead we expect house price inflation to continue to increase as buyer activity increases with clear evidence of growing sales and increased first time buyer activity as household press ahead with buying decisions. The year ahead is on track for 1.2m housing sales, only slightly lower than last year.”

TOUGH MARKET

Tomer Aboody, director of specialist lender MT Finance, said: “No increase in average property values over the past 12 months illustrates the tough market conditions we are facing. Lack of affordability is the overriding concern for many, particularly first-time buyers and those purchasing in the southeast and London.

“Lack of encouragement of any form from the government has fuelled hesitation in both buyers and sellers with many pausing and taking a ‘wait and see’ approach.

“With further reductions in base rate on hold at least for now, and more stamp duty paid due to the lack of any concessions this year, there is little incentive to make a move unless you really have to.

“Despite recent reductions in pricing, mortgage rates are higher than this time last year, so needs-based buyers who still have to move are taking on higher loan-to-values in order to be able to buy.”

GROWING CAUTION

Lee Williams, national sales manager at Saffron for Intermediaries, said: “A reported fall in house prices across England this month reflects the growing caution taking hold across the market. Sustained geopolitical tensions, a domestic policy landscape in flux and the ripple effects of global trade uncertainty have all weighed on buyer sentiment in recent weeks.

“With tariff pressures reshaping economic forecasts and consumer confidence softening, it is little wonder that some buyers have chosen to take a step back before committing to a move.”

“Yet what headline figures suggest does not tell the whole story. Underlying demand remains intact, and for buyers where affordability stacks up, waiting indefinitely carries its own risks. With the Bank of England holding rates and little immediate prospect of cuts, conditions will require careful navigation.”

GLOBAL UNCERTAINTY

Ian Futcher, financial planner at Quilter, said: “London continues to stand out as the weakest major market. Prices in the capital were down 2.1% year on year, the poorest performance of any English region, underlining how stretched affordability remains at higher price points.

“Even with only modest monthly moves, London is clearly bearing the brunt of tighter borrowing conditions, with buyers far more sensitive to mortgage costs than in cheaper regions.

“It is also important to put this data in context as the data set is based on completed transactions, and with a typical 6–8 week gap between agreeing a deal and completion, March’s figures largely reflect decisions taken earlier in the year. Crucially, these slightly depressed readings were recorded at a point when affordability was actually improving somewhat, as mortgage rates had eased back and confidence was stabilising.

“This was also the first full month of the Iran war.”

“This was also the first full month of the Iran war, which quickly injected new global uncertainty into markets. Since then, expectations around interest rates have shifted again, pushing mortgage pricing higher, even though rates have since come down from their peaks.

“The risk looking ahead is that transactions being agreed more recently are facing a tougher affordability backdrop than the one reflected in this data.

“That points to continued pressure on activity and pricing in the near term, with London and other high‑value markets likely to remain the most exposed if borrowing costs stay elevated. At least in the short term, and until there is meaningful progress on the war in Iran, house prices are likely to remain depressed and volatile, reflecting the affordability pressures this situation continues to create.”

CHAOTIC PERIOD

Chris Storey, CCO at Atom bank, said: “These figures are a snapshot of a chaotic period for the housing market, with the conflict in Iran leading to fluctuating swap rates and unexpected increases in mortgage rates.