“The ONS index shows house price inflation has stalled. This is a result of Budget uncertainty over the taxation of housing in the latter part of 2025, as it’s too early for the higher mortgage rates of recent weeks to hit price changes this quickly”
– Richard Donnell – Zoopla
UK house prices were unchanged in the 12 months to March 2026, holding at an average of £268,000, according to provisional ONS data.
The flat reading marks the lowest annual inflation rate since April 2024 and represents a sharp reversal from the 1.7% growth recorded in the 12 months to February 2026.
The ONS attributes much of the slowdown to a technical distortion in the monthly figures. Average prices fell 0.4% between February and March 2026, compared with a rise of 1.2% in the same period a year earlier, a period that saw buyers rushing to complete ahead of the April 2025 stamp duty changes in England and Northern Ireland.
That base effect has pulled the annual rate down sharply, though analysts caution against reading too much into a single month’s figures.
“The ONS index shows house price inflation has stalled. This is a result of Budget uncertainty over the taxation of housing in the latter part of 2025, as it’s too early for the higher mortgage rates of recent weeks to hit price changes this quickly,” said Richard Donnell, executive director of research at Zoopla.
“Looking ahead, we expect house price inflation to continue to increase as buyer activity increases with clear evidence of growing sales and increased first-time buyer activity as households press ahead with buying decisions. The year ahead is on track for 1.2m housing sales, only slightly lower than last year.”
At a national level, the picture is mixed. England saw average prices dip to £290,000, down 0.6% on the year, while Wales bucked the trend with a 2.9% rise to £213,000 and Scotland posted a 1.6% gain to £187,000. Northern Ireland recorded the strongest growth of any UK nation, with prices rising 7.4% to £198,000 in the first quarter of 2026.
Within England, regional divergence is considerable. The East Midlands posted the highest annual inflation of any English region at 0.7%, though even that represents a slowdown from 1.9% the previous month.
London continued its run of negative growth, with prices falling 2.1% in the year to March 2026. That marks the eighth consecutive month of annual declines in the capital, though the rate of decline has eased from the 3.1% recorded in February.
“Static house prices point to a market that is stabilising after a prolonged period of economic uncertainty and higher borrowing costs,” said Nathan Emerson, chief executive of Propertymark.
“From an agent perspective, the market remains active but measured. Buyers are continuing to view and make offers, but they are negotiating more carefully and remain highly conscious of value and monthly mortgage costs.
“Sellers are increasingly having to price realistically to generate interest, and homes that are presented well and aligned to local market conditions are continuing to move. Stability may help rebuild confidence, particularly among first-time buyers who have been waiting for greater certainty around mortgage rates.”
Whether the current flatness proves temporary or marks a more sustained period of subdued growth remains to be seen. The stamp duty distortion will fade from the data in the months ahead, giving a cleaner read on underlying market conditions.
For now, the consensus among analysts points to modest positive growth resuming through the rest of 2026, supported by improving buyer activity and the gradual return of first-time buyers to the market.
