UK House Prices Decline in March
Average UK house prices decreased by 0.5% in March, according to Halifax, the UK's largest mortgage lender. This decline is attributed to higher mortgage rates influenced by the ongoing conflict in Iran, which has dampened buyer demand.
The average property price currently stands at £299,677, with annual growth also slowing down. This marks a reversal from the 0.3% increase recorded in February, prior to the escalation of the conflict. The war has led to increased energy costs, raising concerns about rising inflation and the likelihood that interest rates will not be reduced this year.
Mortgage Market Impact
Mortgage rates have surged recently, resulting in the withdrawal of hundreds of the most affordable mortgage deals over the past few weeks. March experienced the largest daily withdrawal of mortgage deals since the mini-Budget crisis in 2022 under former Prime Minister Liz Truss.
Despite these changes, Halifax noted that the recent rise in mortgage rates has not been as steep as the increases seen four years ago.
Expert Commentary
Amanda Bryden, head of mortgages at Halifax, stated: "The recent slowdown in the housing market reflects the wide uncertainty regarding the conflict in the Middle East."
She added, "Concerns about higher energy prices have pushed up inflation expectations, which in turn led to a rise in mortgage rates, reducing confidence that interest rates will be cut this year and dampening the initial momentum in the market seen at the start of the year."
Outlook on Market Demand
Regarding the duration of weaker demand, Bryden commented: "It would largely depend on how long‑lasting these pressures prove to be and the wider implications for the economy and unemployment."
