Annual growth has also slowed, says Halifax
The latest house price index from the Halifax has revealed a reduction of -0.5% in property values in March, following a 0.3% rise in February.
The average property price is now £299,677, with annual growth also slowing from 1.2% in February to 0.8% a month later.
House prices in the North of England continue to outperform the South, with the North East seeing prices rise by 5% over the year, with prices in the South East falling by -1.9% over the same period.
The recent slowdown in the housing market reflects the wide uncertainty regarding the conflict in the Middle East.
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.
Amanda Bryden, Head of Mortgages, Halifax
Meanwhile, rising borrowing costs have knocked buyer demand and sales volumes, according to the Royal Institution of Chartered Surveyors (RICS).
The latest RICS UK Residential Market Survey has found that fallout linked to the conflict in the Middle East is “taking its toll on both current activity and forward-looking sentiment”.
New buyer enquiries slipped to -39% in March, from -29% in February; the weakest return for the survey’s measure of buyer demand since August 2023.
The volume of agreed sales has also been adversely affected, with the aggregate net balance falling from -13% in February to -34% in March.
Middle East conflict causes sharp material price increase
The latest S&P Global UK Construction Purchasing Managers’ Index has reported another month of declining construction output, alongside the sharpest month-on-month material price increase in almost three decades.
Residential work remained by far the weakest-performing category measured by the index, although at a slightly less marked pace than in the previous month.
Construction companies “widely noted that the war in the Middle East has pushed up fuel, transportation and raw material prices”, according to the survey.
Tim Moore, Economics Director at S&P Global Market Intelligence, said: “Construction firms also signalled a recalibration of their output growth forecasts for the year ahead. The drop in confidence during March wiped out the steady improvements in business optimism reported since the Autumn Budget.
“Escalating inflationary pressures, gloomy domestic economic prospects and higher borrowing costs were widely cited concerns in March.”
Welsh Government urged to act
The Home Builders Federation (HBF) has published a housing blueprint for Wales’ next Government, stating that private housing delivery in the country is “approaching an all-time low”, and that “urgent intervention is needed to create a more favourable policy environment for home building”.
The HBF is urging the next Welsh Government to deliver more homes, make the plan-led system work, and support builders and buyers.
Housing View 