UK house prices have experienced their sharpest drop in a year, following a surge in buyer activity aimed at avoiding stamp duty changes in England and Northern Ireland.
According to Halifax, the average property price declined by 0.5% in March to £296,699 — the biggest monthly fall since March last year. This marks the second straight month of price drops, with February’s decline revised from 0.1% to 0.2% by the UK’s largest mortgage lender.
The consecutive declines follow a record price peak in January, driven by buyers rushing to close deals before new stamp duty rules took effect in April.
“Prices climbed in January due to a rush to meet the stamp duty deadline,” said Amanda Bryden, head of mortgages at Halifax. “But with those transactions now completed, buyer demand is returning to typical levels, and new mortgage applications are slowing.”
In the October budget, Chancellor Rachel Reeves confirmed the end of temporary stamp duty cuts in England and Northern Ireland starting April. Different tax rules apply in Scotland and Wales.
From 1 April, first-time buyers in England and Northern Ireland now face stamp duty on properties priced over £300,000 — down from £425,000. The threshold for discounted rates has also been reduced from £625,000 to £500,000. Meanwhile, the general zero-rate stamp duty threshold has fallen from £250,000 to £125,000.
Bryden added, “We saw more completed house sales in March than in January and February combined — including our busiest day on record. Following that surge, it’s no surprise that prices have dipped, though they’re still close to record highs.”
Despite concerns about the UK economy, many economists and analysts predict house prices will rise in 2025, supported by limited housing supply and steady demand. Falling mortgage rates are also expected to aid sales, with markets anticipating up to three 0.25 percentage point base rate cuts this year.
Nathan Emerson, CEO of Propertymark, commented, “We hope this monthly dip is only temporary. The housing market usually picks up in spring and summer, and attractive mortgage deals — thanks to last year’s rate cuts — could stimulate activity.”
Recent data from Moneyfacts shows a slight drop in mortgage rates. The average two-year fixed rate is now 5.32%, and the five-year rate is 5.17%. Additionally, there are currently 6,945 residential mortgage products available, up slightly from 6,936.
Nevertheless, Halifax’s data indicates the housing market is losing steam. Annual price growth held at 2.8% in March, down from 3.4% in December and 4.7% in November.
