UK house price growth held steady at 3.9% year-on-year in March, unchanged from February, according to the latest data from Nationwide Building Society.

Prices remained flat month-on-month once seasonal effects were accounted for, as the market adjusts to the end of the Stamp Duty holiday.

Robert Gardner, Nationwide’s Chief Economist, said the subdued price movement was expected, as many homebuyers had brought forward their transactions to beat the 1 April stamp duty changes.

“The market is likely to remain a little soft in the coming months since activity will have been brought forward to avoid the additional tax obligations – a pattern typically observed in the wake of the end of stamp duty holidays,” he said.

Despite this, Gardner expects activity to pick up gradually over the summer, supported by a robust labour market, rising real incomes, and the potential for lower borrowing costs should the Bank of England reduce interest rates later in the year.

NORTH OUTPERFORMS SOUTH

Nationwide’s quarterly regional index for Q1 2025 shows that Northern Ireland recorded the strongest growth of any UK region, with average prices rising by 13.5% to £205,796 – the region’s fastest rate since 2021.

Across England, prices rose by 3.3% year-on-year, while the north-south divide remained evident. Northern Englandsaw house prices climb 4.9%, led by the North West, where values were up 5.9% to an average of £221,896.

By contrast, Southern England recorded more modest growth of 2.5%. The Outer South East led the southern regions with a 3% annual increase, while London was the UK’s weakest-performing area, with house prices rising just 1.9%year-on-year to an average of £529,369.

Scotland and Wales also recorded positive growth, at 3.9% and 3.6% respectively, with average prices standing at £186,131 and £209,839.

PROPERTY TYPE BREAKDOWN

In terms of property types, semi-detached homes saw the biggest increase in value over the past year, with prices rising 4.8%. Detached properties followed at 4.5%, while terraced homes rose by 4.1%.

Flats recorded the slowest growth, with a 2.3% annual increase, down from the previous quarter’s pace, reflecting a broader trend seen in recent years.

OUTLOOK

The average UK house price in Q1 2025 stood at £270,867, with a quarterly rise of 1.2% after seasonal adjustment. Gardner noted that, despite wider global economic uncertainty, the conditions for UK homebuyers remain largely favourable.

“The unemployment rate is low, earnings are rising at a healthy pace in real terms, household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters,” he said.

Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, added: “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.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “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.”