House prices dip in March as Middle East conflict impacts market confidence, Halifax reports
UK house prices have fallen in March as the war in Iran brought uncertainty to the market, according to the latest House Price Index from Halifax.
The average house price now stands at £299,677, down 0.5% in March after a small rise of 0.3% in February.
The bank’s data also showed that annual growth slowed in March to 0.8%, down from 1.2% in February, which Halifax says suggests that the market has lost some momentum as spring begins.
Amanda Bryden, head of mortgages at Halifax, said: “The recent slowdown in the housing market reflects the wide uncertainty regarding the conflict in the Middle East. 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.”
“The effect on house prices will largely depend on how long‑lasting these pressures prove to be and the wider implications for the economy and unemployment. Mortgage rates are a key factor for buyers, particularly those getting on the ladder for the first time, who are already balancing the challenge of saving a deposit, with the cost of borrowing. As a result, many are likely to watch movements in mortgage rates closely, before making a decision on any home purchase. In this environment, professional advice can play an important role in helping people understand their options and make informed decisions that are right for their individual circumstances.”
“However, the recent increase in UK mortgage rates has been more modest than the sharp rises seen during the mini-budget of 2022. Further, many households will already be on fixed deals, protecting them from the latest rate rises. Taking all this into account, house prices may prove resilient, even if uncertainty weighs on market activity in the near term.”
On a regional level, Halifax reported a mixed picture, with stronger growth in the North and more subdued conditions in the South.
Northern Ireland continues to lead UK annual house price growth, with average prices up 8.7% over the past year to £224,809. Scotland also recorded strong growth, rising 4.4% annually to an average price of £222,716.
Wales saw a more modest increase of 1.6% on an annual basis, taking the typical home value to £230,909.
In England, stronger price growth remains concentrated in northern regions. The North East saw prices rise 5% over the year to £184,119, while the North West recorded annual growth of 3.1%, with the average home now costing £247,442.
By contrast, the southern markets continue to see prices ease. The South East led declines, with prices down 1.9% year‑on‑year to £383,573, while London saw average values fall by 1.2% to £536,751.
Meanwhile, the latest HMRC property transaction data showed that home sales increased in February, with UK seasonally adjusted residential transactions totalling 102,410 for the month, up 5.6% from January. The figure represents the highest monthly transaction figure since March 2025.
Latest Bank of England figures show the number of mortgages approved to finance house purchases also increased in February 2026 by 3.9% to 62,584. Year-on-year the figure was -3.9% below February 2025.
Source: Showhouse
