UK house prices held steady in March, maintaining a 3.9% year-on-year growth, according to the latest data from Nationwide Building Society.
While this may seem like just another statistic, the numbers tell an interesting story about the shifting landscape of homeownership, affordability and what buyers and sellers can expect as the year progresses.
So what’s really happening?
The flat month-on-month change isn’t surprising. Many buyers rushed to complete their purchases before the 1 April stamp duty changes, effectively pulling forward demand that might have otherwise spread throughout the year.
As a result, activity is expected to slow in the coming months before picking up again over the summer.
However, industry experts are optimistic. With a strong labour market, rising real incomes, and potential interest rate cuts later in the year, market conditions remain favourable for those looking to buy or sell.
REGIONAL TRENDS
One of the more striking takeaways from the latest data is the continued divide between the northern and southern housing markets.
Northern Ireland saw the strongest growth, with prices surging 13.5% year-on-year, its fastest pace since 2021.
Across England, the North West led the charge with a 5.9% increase, while London lagged behind at just 1.9% - a reflection of affordability concerns and changing demand patterns in the capital.
Scotland and Wales also recorded steady growth at 3.9% and 3.6% respectively, reinforcing the idea that buyers are looking beyond traditional property hotspots for value.
WHAT'S SELLING
Semi-detached homes saw the highest price increase at 4.8%, followed closely by detached properties at 4.5%.
Terraced homes weren’t far behind, with a 4.1% rise. Flats, however, trailed significantly with just a 2.3% increase, highlighting a broader trend of buyers prioritizing space over city living.
This shift isn’t new, but it does raise questions about whether flats will see a resurgence in demand as affordability pressures push buyers back toward smaller properties.
EXPERT VIEW
The market’s resilience is evident, but what do the experts think? Jean Jameson of Foxtons believes recent interest rate cuts have played a far greater role in boosting buyer confidence than the stamp duty deadline.
Meanwhile, Knight Frank’s Tom Bill expects a temporary slowdown in activity but remains optimistic about a recovery by summer.
Supply is another key factor. While demand remains high, strong levels of new listings should help keep price inflation in check.
As The Guild of Property Professionals’ Iain McKenzie says, the market remains well-placed for stability despite the adjustment period following the stamp duty changes.
AFFORDABILITY ISSUES
While wage growth and lower interest rates should support buyer confidence, affordability remains a key concern.
Jonathan Handford of Fine & Country points out that mortgage approvals declined in February, suggesting that even with improved borrowing conditions, many buyers are still cautious. The lingering effects of inflation and the high cost of living mean that affordability will likely be a defining issue for the market in the months ahead.
LOOKING AHEAD
With the traditionally busy spring and summer months approaching, estate agents are preparing for an uptick in activity.
However, as Propertymark’s Nathan Emerson points out, the market is still feeling the impact of inflation and fluctuating interest rates. The hope is that continued rate cuts will translate into more attractive mortgage deals, boosting both demand and transaction volumes.
For those looking to buy, sell, or invest, the market remains in a state of flux – but not necessarily in a bad way.
Sellers will need to price strategically, while buyers should be prepared to act quickly in competitive areas.
With potential interest rate cuts on the horizon, the second half of 2025 could bring even more opportunities for those ready to make their move.
One thing is clear: while the market is adjusting, it’s far from stagnant. And for those willing to navigate its complexities, there are still plenty of opportunities to be found.
But remember, smart choices start with expert advice – speak to your mortgage adviser to get the best for your financial future.
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