Market cools post Stamp Duty rush
UK house prices continued to grow at a steady pace in March, with annual growth unchanged at 3.9%, according to the latest Nationwide House Price Index. On a monthly basis, prices were flat after adjusting for seasonal factors.
“These price trends are unsurprising, given the end of the Stamp Duty holiday at the end of March,” said Robert Gardner (pictured left), chief economist at Nationwide Building Society. He noted that deals approved late in the month likely did not close in time to benefit from the tax break.
“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,” he added.
According to Amy Reynolds (pictured centre), head of sales at Richmond estate agency Antony Roberts, property prices are being held in check due to affordability constraints, higher mortgage rates and cautious buyer sentiment.
“The Stamp Duty concession focused the minds of buyers, encouraging them to bring forward transactions,” she said. “Higher borrowing costs and affordability pressures remain an issue, and it will be interesting to see the reaction in the second quarter of the year with the concession no longer available.
“The approaching end of the Stamp Duty holiday brought a flurry of activity, which is being replaced with buyer demand for houses in the £1 million to £2 million range, as we would expect at this time of year in a more ’normal’ market.”
Mark Harris (pictured right), chief executive of mortgage broker SPF Private Clients, noted that March was a busy month for the housing market as expected, but particularly so this year ahead of the window to make Stamp Duty savings closing.
“It was disappointing not to see an extension of this in the Chancellor’s Spring Statement or another alternative to support first-time buyers,” Harris said. “Part of the additional cost is likely to be absorbed into house prices and form part of the negotiation process between vendors and buyers.
“Some incentive or inducement to get first-time buyers (and others) to come to market would give transaction numbers a boost, which are so vital for the overall health of the market. Further rate cuts would be welcome although the pace that which they are coming has unfortunately slowed.”
Looking ahead, Gardner said the housing market should gradually regain momentum through the summer. “Activity is likely to pick up steadily as the summer progresses, despite wider economic uncertainties in the global economy,” he said, pointing to supportive conditions for buyers such as low unemployment, rising real wages, strong household finances and the potential for lower borrowing costs if the Bank of England cuts interest rates later in the year.
Nationwide’s quarterly data showed that most UK regions experienced similar annual growth rates to the previous quarter. Northern Ireland led regional gains, with prices up 13.5% year-on-year — the highest since 2021 and more than twice the pace of any other area.
Scotland saw a 3.9% annual increase, while prices in Wales rose by 3.6%. Across England, the yearly growth rate was 3.3%, only slightly higher than the 3.1% recorded in the previous quarter.
Northern England continued to outperform the south, with prices rising 4.9% annually. The North West was the strongest performer in England, with a 5.9% year-on-year gain. By contrast, southern regions posted a 2.5% increase, with the Outer South East seeing the highest growth in the area at 3.0%. London remained the weakest UK region, with prices up just 1.9% compared to a year earlier.
Among different types of homes, semi-detached houses recorded the highest annual price rise at 4.8%. Detached properties saw a 4.5% increase, while terraced homes rose by 4.1%. Flats experienced the slowest growth, with prices up just 2.3% — a deceleration from the previous quarter.
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