Annual house price growth in the UK dropped to 9.8% in the year to March, according to the latest UK House Price Index published by the Office for National Statistics (ONS).

The figure was down from the 11.3% reported by the ONS in the year to February.

This means the average UK house price stood at £278,000 in March 2022, a level £24,000 higher than the same time last year.

On a regional basis, average house prices have increased over the year by 9.9% in England to £298,000, 11.7% in Wales to £206,000, 8.0% in Scotland to £181,000 and 10.4% in Northern Ireland to £165,000. London was again the region with the lowest annual rate of growth anywhere in the UK, at 4.8%.

“House prices cooled in March relative to February and we can expect more of this throughout the year given the frightening level of inflation,” commented Coreco managing director, Andrew Montlake. 

“The stamp duty holiday, record low interest rates and the race for space triggered an unprecedented surge in demand and activity during the pandemic, but those days are now over.

“With 9% inflation, rising interest rates and a potential recession ahead, it will impact demand while lenders are becoming ever more cautious, which will restrict what people can borrow. This will almost certainly see the rate of price growth slow during 2022 and into next year. Only the entrenched lack of supply can prevent prices from falling.”

Head of finova Payment and Mortgage Services, Melanie Spencer, added: “A lack of sufficient housing supply has continued to drive up property prices in March. Yet, in the coming months we can expect home buying activity in the market to slow as surging inflation and the ongoing cost of living crisis continue to dent people’s savings and leave their finances stretched.

“Following a record-breaking two years, brokers will now be feeling challenged in new areas as they support clients facing financial difficulty. For first-time buyers and movers attempting to navigate the property ladder, rising bills paired with higher interest rates may set back their housing plans, while others will need support with remortgaging.”

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