Property prices fell by 1% in March compared to February, according to Halifax.
The UK’s largest lender said that the typical UK home now costs £288,430, around £2,900 less than last month.
Despite the dip, average property prices have inched up by 0.3% over the year since last March.
That’s a marked slowdown in annual growth, from 1.6% last month.
On a quarterly basis, house prices are up 2%.
Kim Kinnaird, director of Halifax Mortgages, said: “Affordability constraints continue to be a challenge for prospective buyers, while existing homeowners on cheaper fixed term deals are yet to feel the full effect of higher interest rates. This means the housing market is still to fully adjust, with sellers likely to be pricing their properties accordingly.”
“The broader picture is that house prices are up year-on-year, reflecting the opposing forces of an easing cost-of-living squeeze – now that pay growth is outpacing general inflation – and relatively high interest rates. Taking a slightly longer-term view, prices haven’t changed much over the past couple of years, moving in a narrow range since the spring of 2022, and are still almost £50,000 above pre-pandemic levels.”
Regions and nations
Northern Ireland remains the strongest performing nation or region in the UK, said Halifax, with house prices up by 4.3% on an annual basis. Properties in Northern Ireland now cost an average of £194,743, £7,972 more than a year ago.
In Wales, annual property price growth slowed to 1.9% in March from 3.9% in February, with the average home now costing £219,213.
Scottish house prices rose 2.1% year-on-year to £204,835.
The North West saw the strongest growth in England, up by 3.7% on an annual basis to £232,315.
Eastern England recorded the biggest fall in house prices, of 0.9%, with homes selling for an average of £330,627 – a drop of £2,878 over the last year.
London still has the highest average house price in the UK, at £539,917. Prices in the capital have increased by 0.4% over the last year.
Nathan Emerson, CEO at Propertymark, said: “Spring tends to be one of the busiest times of the year for the housing market, and with inflation falling and interest rates remaining static, homebuyers have adjusted to the latest market conditions.
“This should result in a surge of new buyers, sellers, and properties coming to the market as the year progresses.”
