Annual UK house price growth accelerated to 6.4% in the year to March, taking the average price to £271,000, new data published by the Office for National Statistics (ONS) has shown.

The latest figure was up from 5.5% in the year to February.

According to the ONS House Price Index, annual house price inflation has been generally increasing since its recent low point of -2.7% recorded in December 2023.

Across the home nations, latest figures showed that average house price in England hit £296,000 in March, a figure up 6.7% from a year ago equating to an increase of £19,000.

In Wales, the average house price has climbed by £7,000 in the last year to reach £208,000, a 3.6% increase, while Scottish house prices increased by 4.2% in the year to March to an average £186,000, up £8,000 from the same time last year.

Northern Ireland saw its average house price in this year’s first quarter jump to £185,000, a level up 9.5% and by £16,000 in comparison to Q1 2024.

“Borrowing costs have improved somewhat recently, with mortgage rates lowering following the Bank of England’s rate cuts,” commented mortgage expert at Quilter, Karen Noye. “However, with inflation spiking to 3.5% and the economy doing better than had been feared at the start of the year, there is a chance it will hold off on further cuts for now and mortgage rates would follow suit.

“What’s more, the changes to stamp duty have added to upfront costs, particularly for those purchasing in higher-value areas. This shift in taxation has added yet another affordability challenge at a time when many buyers are already stretched.”

Noye also suggested that with the higher cost of moving home, prospective buyers would have “less incentive” to move, and first-time buyers may “simply be priced out” until they are able to build their savings to cover the higher costs.

“Looking ahead, we are likely to see a marked slowdown in property transactions and a subsequent stalling of prices,” she added. “Instead of a sharp decline, the market is more likely to stabilise due to constrained supply and ongoing affordability challenges.”

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