UK house prices drop as stamp duty holiday ends

In March 2025, the average house price in the UK saw a decline due to several factors, including the end of a stamp duty holiday that had previously motivated many property purchases. According to Halifax, the average house price dropped by £1,575, bringing the typical value to £296,699 from £298,274 in February. Despite this monthly decline, the annual growth rate remained steady at 2.8%. The end of the stamp duty holiday had a substantial impact, as many buyers failed to finalize their transactions before the deadline, leading to decreased activity in the market. Halifax noted that Northern Ireland continues to experience the highest annual property price growth, with an increase of 6.6% in March. Scotland followed with a 4.3% increase, while in England, areas like Yorkshire and the Humber showed strong growth, recording a 4.2% increase in house prices over the year. However, London saw a much weaker annual growth rate of only 1.1%, primarily due to its high property prices which pose significant hurdles for many buyers, particularly under the new stamp duty regulations. In further analysis, Halifax's head of mortgages, Amanda Bryden, mentioned an initial surge in house prices in January as buyers hurried to meet the stamp duty deadline. However, this activity did not sustain itself into March, resulting in the recent price drop, despite the average prices still being higher than those recorded in the summer of 2022. The UK housing market's situation is compounded by higher borrowing costs, a limited supply of properties, and an uncertain economic outlook, creating challenges for potential buyers attempting to navigate these changes. Experts, including Alice Haine, a personal finance analyst, stated that first-time buyers are particularly affected by the changes in stamp duty thresholds, facing additional financial strain. Property professionals have indicated that sellers may feel disheartened by the price reduction, while some view it as an opportunity for aspiring homeowners to enter the market at a slightly lower pricing point. Overall, while easing mortgage rates may improve affordability in the long run, the market dynamics indicate more challenges than solutions in the immediate future.