- House prices fell by 0.5% in March, according to Halifax
The typical home fell in value by £1,374 last month as mortgage rates spiked on Iran war uncertainty.
House prices fell 0.5 per cent in March, according to the latest figures from Halifax. It followed an 0.3 per cent monthly rise in February.
It means the average home is now worth £299,677, having dipped below the £300,000 mark reached at the start of the year.
Compared to March 2025, prices have risen by 0.8 per cent.
Amanda Bryden, head of mortgages at Halifax said the ‘slowdown’ in the housing market was due to uncertainty regarding the conflict in the Middle East.
She said: ‘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.’
Since the start of March, banks and building societies have increased mortgage rates.
The lowest fixed rate deals went from around 3.5 per cent to around 4.75 per cent in a matter of weeks.
On a £200,000 mortgage being repaid over 25 years, that could be the difference between paying £1,002 a month and £1,140 a month.
Bryden added: ‘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.’
Jonathan Hopper, a buying agent and chief executive of Garrington Property Finders, said: ‘The surge in the cost of fixed rate mortgages over the past month has cooled buyer demand, as has the general sense of uncertainty caused by the war.’
Will ceasefire reduce mortgage rates?
This uncertainty remains despite Donald Trump last night declaring Iran and the US had agreed to a two-week ceasefire that will open the Strait of Hormuz.
As a result, the price of oil fell back below $100 a barrel and stock markets rallied around the globe.
Mortgage rates could fall if the conflict eases, though this will take some time.
Tom Bill of estate agent Knight Frank said: ‘What goes up must come down, but for mortgage rates the drop will be more gradual than the sharp increase triggered by the Middle East conflict, even if the two-week ceasefire deal holds.
‘Sentiment in the housing market will improve if the war stops, but its longer-term inflationary impact and weaker demand for UK government debt due to its tight financial headroom and apparent inability to cut spending means mortgage rates won’t snap back to where they were in February.
‘This will keep demand and house prices in check this year.’
