UK house price growth stays stagnant in March ahead of stamp duty hike
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UK house price growth remained stable in March, unchanged from February, as buyers pulled back from deals concerned they would not complete before the stamp duty hike from 1 April.
According to the
Nationwide House Price Index
released on Tuesday, on an annual basis, UK house prices stayed at 3.9%. Northern Ireland was the top performing area with annual price growth accelerating to 13.5%, while London was the weakest performing region with a 1.9% year-on-year rise.
'There was no change in prices month-on-month, after taking account of seasonal effects. These price trends are unsurprising, given the end of the stamp duty holiday at the end of March (transactions associated with mortgage approvals made in March, especially toward the end of the month, would be unlikely to complete before the deadline).
'Indeed, 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,' Robert Gardner, Nationwide's Chief Economist, said in the report.
However, he said that activity is likely to pick up steadily as the summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive.
'The unemployment rate is low, earnings are rising at a healthy pace in real terms (i.e. after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect,' he added.
Related
UK average house price dips unexpectedly in February as demand slows
When does the stamp duty threshold change?
The temporary threshold increases to Stamp Duty Land Tax (SDLT) ended as of 1 April 2025.
It means that first-time buyers now have to pay
stamp duty
when buying homes worth £300,000 (€358,467) and above from now on, down from the
previous
£425,000 (€507,836.8) threshold.
For repeat buyers who own only one residential property, stamp duty is nil up to £125,000 (€149,556.9), with the next £125,000 taxed at 2%. Stamp duty is 5% for the following £675,000 (€807,441.8), while the next £575,000 (€687,809.3) is taxed at 10%. The SDLT rate for any amount above £1.5 million (€1.8m) is 12%.
Buyers have to pay an extra 5% SDLT on top of these rates, if they own another residential property.
How much do properties cost across the UK?
For the first three months to March, the average property price in Northern Ireland was £205,796 (€245,986), while the average price in Scotland was £186,131 (€222,503).
In Wales, property prices rose 3.6% in the first quarter of this year, with the average house setting buyers back by about £209,839 (€250,839).
In England, the North West saw the second highest house price growth in the UK in the first quarter of 2025, at 5.9%, with the North seeing a rise of 4.7%. Property prices rose 3% in the outer South East, with an increase of 5.8% in the West Midlands and a growth of 2.8% in the South West.
The average London property cost £529,369 (€632,691.2) in Q1 2025, with house price growth coming in at 1.9%, compared to 2% in the previous quarter.
On a monthly basis, UK house prices flatlined in March, compared to a 0.4% rise in February.
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Pantheon Macroeconomics said in an email note: 'The 0.0% growth rate for March is the first instance in seven months where the index has failed to rise, though strong gains over the winter in the index still point to healthy increases in the ONS official measure of house prices, which typically lags movements in the private sector indices.'
It also noted that no change in the index in March was impressive, given the uncertainty households most likely felt because of the Chancellor's Spring Statement and the looming stamp duty threshold changes.
Related
Property sector in danger? More countries may follow Spain's tax moves
Homebuyers expected to be more cautious in coming months
Alice Paine, personal finance analyst at Bestinvest by Evelyn Partners, pointed out that house buyers were likely to be more hesitant to make purchases in the next few months, given the stamp duty increases.
'Homebuyers are likely to weigh up the cost of home ownership very carefully from today. As well as rising transaction costs, they must contend with uncertainty about the wider economy as the country braces for the fallout from the triple hit to businesses this month from rising National Insurance costs, business rates and the minimum wage.
ADVERTISEMENT
'Many employers plan to pass on higher costs to consumers, and with a raft of household bills going up from today - from energy to water, council tax and more - budgets are going to get stretched to the max,' she said.
Hope for first-time buyers
Paine also highlighted that even though borrowing costs may fall if the Bank of England chooses to keep loosening its monetary policy, the economic outlook for the UK is still uncertain. This is mainly because of escalating tariff threats from US president Donald Trump, as well as the potential impact of Chancellor Rachel Reeves' tax increases.
However, there may be a silver lining for first-time buyers, as a number of mortgage providers now seem to be easing their lending terms, with a wider range of no-deposit mortgages now available.
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ADVERTISEMENT UK house price growth remained stable in March, unchanged from February, as buyers pulled back from deals concerned they would not complete before the stamp duty hike from 1 April. According to the Nationwide House Price Index released on Tuesday, on an annual basis, UK house prices stayed at 3.9%. Northern Ireland was the top performing area with annual price growth accelerating to 13.5%, while London was the weakest performing region with a 1.9% year-on-year rise. 'There was no change in prices month-on-month, after taking account of seasonal effects. These price trends are unsurprising, given the end of the stamp duty holiday at the end of March (transactions associated with mortgage approvals made in March, especially toward the end of the month, would be unlikely to complete before the deadline). 'Indeed, 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,' Robert Gardner, Nationwide's Chief Economist, said in the report. However, he said that activity is likely to pick up steadily as the summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive. 'The unemployment rate is low, earnings are rising at a healthy pace in real terms (i.e. after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect,' he added. Related UK average house price dips unexpectedly in February as demand slows When does the stamp duty threshold change? The temporary threshold increases to Stamp Duty Land Tax (SDLT) ended as of 1 April 2025. It means that first-time buyers now have to pay stamp duty when buying homes worth £300,000 (€358,467) and above from now on, down from the previous £425,000 (€507,836.8) threshold. For repeat buyers who own only one residential property, stamp duty is nil up to £125,000 (€149,556.9), with the next £125,000 taxed at 2%. Stamp duty is 5% for the following £675,000 (€807,441.8), while the next £575,000 (€687,809.3) is taxed at 10%. The SDLT rate for any amount above £1.5 million (€1.8m) is 12%. Buyers have to pay an extra 5% SDLT on top of these rates, if they own another residential property. How much do properties cost across the UK? For the first three months to March, the average property price in Northern Ireland was £205,796 (€245,986), while the average price in Scotland was £186,131 (€222,503). In Wales, property prices rose 3.6% in the first quarter of this year, with the average house setting buyers back by about £209,839 (€250,839). In England, the North West saw the second highest house price growth in the UK in the first quarter of 2025, at 5.9%, with the North seeing a rise of 4.7%. Property prices rose 3% in the outer South East, with an increase of 5.8% in the West Midlands and a growth of 2.8% in the South West. The average London property cost £529,369 (€632,691.2) in Q1 2025, with house price growth coming in at 1.9%, compared to 2% in the previous quarter. On a monthly basis, UK house prices flatlined in March, compared to a 0.4% rise in February. ADVERTISEMENT Pantheon Macroeconomics said in an email note: 'The 0.0% growth rate for March is the first instance in seven months where the index has failed to rise, though strong gains over the winter in the index still point to healthy increases in the ONS official measure of house prices, which typically lags movements in the private sector indices.' It also noted that no change in the index in March was impressive, given the uncertainty households most likely felt because of the Chancellor's Spring Statement and the looming stamp duty threshold changes. Related Property sector in danger? More countries may follow Spain's tax moves Homebuyers expected to be more cautious in coming months Alice Paine, personal finance analyst at Bestinvest by Evelyn Partners, pointed out that house buyers were likely to be more hesitant to make purchases in the next few months, given the stamp duty increases. 'Homebuyers are likely to weigh up the cost of home ownership very carefully from today. As well as rising transaction costs, they must contend with uncertainty about the wider economy as the country braces for the fallout from the triple hit to businesses this month from rising National Insurance costs, business rates and the minimum wage. ADVERTISEMENT 'Many employers plan to pass on higher costs to consumers, and with a raft of household bills going up from today - from energy to water, council tax and more - budgets are going to get stretched to the max,' she said. Hope for first-time buyers Paine also highlighted that even though borrowing costs may fall if the Bank of England chooses to keep loosening its monetary policy, the economic outlook for the UK is still uncertain. This is mainly because of escalating tariff threats from US president Donald Trump, as well as the potential impact of Chancellor Rachel Reeves' tax increases. However, there may be a silver lining for first-time buyers, as a number of mortgage providers now seem to be easing their lending terms, with a wider range of no-deposit mortgages now available.
