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LONDON – British house prices unexpectedly slipped in March 2025, as the housing market cooled following a buying frenzy tied to the expiration of tax incentives for homebuyers.
According to new data from mortgage lender Halifax, house prices fell by 0.5% from February—missing expectations of a slight increase. A Reuters poll of economists had forecast a 0.1% rise. Halifax also revised February’s figures downward, showing a 0.2% drop instead of the previously reported 0.1%.
Despite the monthly dip, house prices in March were still up 2.8% compared to a year earlier, maintaining the same annual growth pace seen in February.
The downturn comes after a surge in purchases leading up to the March 31 expiration of temporary tax incentives designed to help first-time buyers and those purchasing lower-priced homes. Analysts believe the phase-out created a short-term demand spike that is now settling.
Nationwide, another major UK mortgage lender, echoed this trend last week, reporting flat prices in March and forecasting a “soft” market in the near term.
Amanda Bryden, head of mortgages at Halifax, said the market is now returning to a more typical rhythm. “Demand is normalizing after the tax change rush, and we’re seeing a slowdown in new mortgage applications,” she noted.
Buyers are still navigating a challenging landscape. Elevated interest rates, limited housing supply, and broader economic uncertainty continue to impact affordability and consumer confidence.
“However, with base rate cuts anticipated and real wages on the rise, we expect mortgage affordability to gradually improve,” Bryden said. “We continue to forecast a modest rise in house prices over the rest of the year.”
The UK government’s long-term housing strategy, including its plan to build 1.5 million new homes, may also play a role in shaping market trends in the quarters ahead.
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