House prices ticked up slightly in March with average property adding £2,000, says Halifax

House prices rose slightly in March, with average property adding £2,000, but Halifax warns of a ‘continued slowdown’ this year

  • The median house price in the UK is now £287,990, according to Halifax
  • All countries and regions in the UK saw house prices rise in March 2023
  • But it expects to see a “sustained slowdown” throughout this year

According to Halifax, the housing marker shows “resilience” as prices continue to rise moderately despite the economic headwind of high inflation and interest rates.

However, the lender warned of a “continued slowdown” in price growth this year as mortgage rates are unlikely to fall substantially.

Typical property now costs £287,990, it said, up 0.8 per cent or £2,200 from last month but down 2 per cent from its August peak.

Annual prices rose by 1.6 percent in March, compared to 2.1 percent in the previous three months.

In addition, house prices rose in all UK countries and regions last month.

The median house price in the UK is now £287,990, up £2,200 from last month

Kim Kinnaird, director of Halifax Mortgages, said: “Overall, these latest figures continue to point to relative stability in the housing market at the start of 2023 and are consistent with many other recent industry surveys and data.

“This has been marked by a partial recovery in activity and transactions, especially compared to the significant declines late last year, with the latest data from the Bank of England showing mortgage approvals rising for the first time in six months.”

Kinniard said lower mortgage rates in the first few months of this year were the driving factor behind the improved picture, with “the sudden spike in borrowing costs we saw in November and December now largely reversed.”

In October, average fixed rates peaked at 6.65 for a five-year period and 6.52 for a two-year period. Five-year fixed rate agreements now average 5.04 percent, according to Moneyfacts. The average two-year fixed interest rate is now 5.35 percent.

It means that someone who takes out a new £200,000 mortgage over 25 years today, with a fixed two-year deal, will typically pay £143 less per month compared to someone who takes out a mortgage in October.

The most recent figures from the Bank of England show that the number of mortgages approved for home purchases increased by 9.8% in February 2023 compared to the previous month, to 43,536.

House price growth remained positive in March, but has slowed compared to previous months

House price growth remained positive in March, but has slowed compared to previous months

Regionally, Northern Ireland continues to report the strongest annual house price growth of 4.9 per cent, with an average house price of £186,459. It is followed by the West Midlands where prices rose by 3.8 per cent with an average property price of £248,308.

However, Kinniard says Halifax expects “a continued slowdown in growth this year.”

“While the path for interest rates is uncertain, mortgage costs are unlikely to become significantly cheaper in the near term and housing market performance will continue to reflect these new norms of higher borrowing costs and lower demand,” she added.

What to do if you need a mortgage

Borrowers who need to find a mortgage because their current fixed-rate contract is about to expire, or because they have agreed on a home purchase, should explore their options as soon as possible.

This is Money’s best mortgage interest calculator powered by L&C that can show you deals that match your mortgage and property value

What if I have to borrow again?

Borrowers should compare rates and speak with a mortgage broker and be prepared to trade to secure a rate.

Anyone with a fixed-rate deal expiring in the next six to nine months should research how much it would cost them to re-mortgage now — and consider getting a new deal.

Most mortgage agreements allow fees to be added to the loan and are not charged until it is closed. By doing this, borrowers can secure a rate without paying expensive arrangement fees.

What if I buy a house?

Those with an agreed home purchase should also aim to secure rates as soon as possible so they know exactly what their monthly payments will be.

Homebuyers should be careful not to overextend themselves and be prepared for the possibility that house prices could fall from their current highs, due to higher mortgage rates limiting people’s borrowing capacity.

Compare mortgage payments

The best way to compare mortgage rates and find the right deal for you is to talk to a good real estate agent.

You can use our best mortgage interest calculator to display deals that match your home value, mortgage size, term and fixed interest needs.

However, bear in mind that rates can change quickly, so if you need a mortgage it’s advice to compare rates and then speak to an estate agent as soon as possible so they can help you find the right one mortgage for you.

> Check out the best fixed rate mortgages you can apply for