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UK house prices dipped in March, according to new data from lender Halifax, as uncertainty from the war in the Middle East and a rise in mortgage rates start to weigh on demand.
Data published on Wednesday showed the average UK house price fell to £299,677 in March, a decline of 0.5 per cent from the previous month.
The figures suggest the UK housing market has started to slow again after a brief recovery from a dip at the end of 2025. Halifax reported month-on-month growth of 0.3 per cent in February.
Amanda Bryden, head of mortgages at Halifax, said the slowdown reflected “wide uncertainty” about the conflict in the Middle East, with higher mortgage rates “dampening the initial momentum in the market seen at the start of the year”.
However, she added that the longer-term effect on house prices depended on “how long-lasting these pressures prove to be”, noting that the recent increase in rates was more modest than the sharp rise following the ‘mini budget’ in 2022.
The south east of England recorded the largest annual decline of 1.9 per cent in the first quarter, while prices in London declined by 1.2 per cent on average. Northern Ireland continued to lead the market with year-on-year growth of 8.7 per cent.
The Halifax data contrasts with the figures published by Nationwide last week, which showed month-on-month growth of 0.9 per cent in March, up from 0.3 per cent in February.
Halifax’s figures are typically based on a larger sample of transactions than Nationwide, with a greater focus on the northern regions. This can generate short-term differences in their estimates but longer-term trends tend to align.
Ashley Webb, senior UK economist at Capital Economics, said the new figures suggested the jump in mortgage rates since the start of the Iran war had “weighed more heavily on house prices” than the Nationwide data implied.
“Given many households are on fixed rate deals, house price growth will probably remain subdued in the coming months as the jump in mortgage rates takes time to be fully felt,” he added.
The average two-year fix was 5.9 per cent on Wednesday, up from 4.83 per cent at the start of March, according to finance website Moneyfacts.
“The sharp rise in mortgage rates and the weaker economic outlook since the start of the Iran war implies house price growth will remain soft this year,” said Webb.
“Much depends on how events in the Middle East evolve and whether the recently agreed two-week US-Iran ceasefire holds.”
