UK house prices fall between February and March — but are still higher than a year ago

The average UK home was sold for £285,000 in March  (Daniel Lynch)
The average UK home was sold for £285,000 in March (Daniel Lynch)

London homebuyers spent an average of £523,000 on properties in March 2023, according to new data from the Office for National Statistics.

The capital’s house prices remain the most expensive of any UK region and saw the lowest annual increase of 1.5 per cent in the year to March.

Across the UK, the price of an average home rose 4.1 per cent in the year to March — but fell compared to the month before.

Official data revealed that the average home was sold for £285,000 in March, £3,000 lower than just a month earlier, but £11,000 higher than the same month a year ago.

It is also £8,000 below the recent peak price in November last year.

The average price in England was £304,000, up 4.1% over the year. In Wales it was £214,000, up 4.8 per cent, while prices rose three per cent to £185,000 in Scotland and five per cent to £172,000 in Northern Ireland.

In England, the highest annual increase was in the South West, up 5.4 per cent, while London’s house prices only rose 1.5 per cent.

The annual price increase is a considerable slowdown from July last year when the cost of a property had soared 14.4 per cent in just 12 months.

The ONS said that there had been some 89,560 residential house purchases last month, nearly 19 per cent lower than a year earlier, but up slightly by 1.3 per cent from February.

“Rising interest rates and economic pressures have not stood in the way of many buyers or sellers’ ambitions as the housing market shows strong resilience and house prices rise in March,” said Emma Cox, managing director of real estate at Shawbrook Bank.

“Reports that the economic outlook isn’t as bleak as previously forecast has prompted a return in confidence and demand.

“And while buyers are likely to remain relatively cautious moving forwards, as mortgage rates remain high in line with rising interest rates, it’s encouraging to see these signs of optimism back in the market.

“The well-documented lack of supply within the rental market, could prompt professional landlords to snap up properties and expand their rental portfolios before any further price rises.

“This should help to provide an injection of quality stock, with demand currently being starved of good, available properties for renters.”