UK House Prices Decline Following End of Stamp Duty Holiday
UK House Prices Decline Following End of Stamp Duty Holiday
In March 2025, the UK’s housing market experienced a downturn, with average house prices falling by 0.5% compared to February, according to data from Halifax. This decline brings the average property price to £296,699, down from £298,274 the previous month. The decrease is attributed to the conclusion of the stamp duty holiday, which had previously stimulated market activity by offering tax incentives to buyers.
The annual house price inflation rate remained steady at 2.8%, indicating that, despite the monthly drop, prices are still higher than they were during the same period last year. The end of the stamp duty holiday on March 31 led to a surge in property transactions earlier in the year, as buyers rushed to complete purchases before the tax benefits expired. This surge was followed by a natural slowdown in market activity once the incentives were removed.
Amanda Bryden, Head of Mortgages at Halifax, noted that the market is adjusting to the new landscape post-stamp duty holiday. She highlighted that potential buyers are now facing challenges such as higher borrowing costs, limited housing supply, and economic uncertainty. However, she also pointed out that anticipated base rate cuts and positive wage growth could gradually improve mortgage affordability, potentially leading to modest price increases later in the year.
Regionally, Northern Ireland recorded the strongest annual house price growth at 6.6%, with average prices reaching £206,620. In England, the Yorkshire and Humberside region saw a 4.2% increase, bringing average property prices to £215,807. London experienced a more modest growth of 1.1%, though it remains the most expensive area in the UK, with average prices at £543,370.
The conclusion of the stamp duty holiday has undeniably impacted the housing market, leading to a temporary dip in prices as the market recalibrates. While challenges persist, the outlook suggests that with improving economic conditions and potential policy adjustments, the market may see a return to growth in the coming months.
