UK home costs: How a lot they elevated in March and why

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Your assist makes all of the distinction. Learn extra UK home costs surged 6.4 per cent yearly in March, reaching a median of £271,000, in accordance with the Workplace for Nationwide Statistics (ONS).

This acceleration from February's 5.5 per cent development coincided with a rush of homebuyers looking for to finish purchases earlier than the April conclusion of a stamp obligation vacation in England and Northern Eire.

This surge within the housing market comes as UK inflation hit a 15-month excessive, including additional stress on family funds already grappling with rising dwelling prices.

The Client Costs Index (CPI) revealed inflation jumped to three.5 per cent in April, exceeding economists' predictions of three.3 per cent and considerably up from March's 2.6 per cent.

This inflationary spike, coupled with numerous invoice will increase in what has been dubbed an "terrible April", paints a difficult image for family budgets.

The ONS knowledge highlights the interaction of market forces, authorities coverage, and financial traits impacting private funds throughout the UK.

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Graphic displaying the year-on-year change in common UK home costs (PA Graphics) Andrew Montlake, chief govt at Coreco mortgage brokers, mentioned: “With inflation edging up sharply this morning, and mortgage charges more likely to comply with as expectations of additional base charge cuts cut back, this might see common values begin to retreat once more. If costs do begin to ease, they are going to solely go as far as there's a basic lack of provide.”

Jonathan Handford, managing director at property agent group Effective & Nation, mentioned: “Within the months forward, inflation and still-elevated borrowing prices are more likely to weigh on demand, notably as affordability stays stretched throughout a lot of the nation.

“That mentioned, a interval of softer or stabilising home costs could supply a welcome alternative for first-time patrons who've been priced out in some areas of the nation.”

Sarah Coles, head of non-public finance at Hargreaves Lansdown, mentioned the “rush to seal a deal” earlier than the top of the stamp obligation vacation supplied some additional impetus for the housing market.

She added: “This will effectively gradual once more within the subsequent set of figures, which is the same old sample within the aftermath of a stamp obligation vacation. Nevertheless, we’re unlikely to see something too dramatic.

“This era has been marked by sturdy worth development fairly than stellar leaps, so the hangover from the property get together is more likely to be much less painful.

“Decrease mortgage charges must also assist assist costs. Nevertheless, with purchaser numbers more likely to have dropped off pretty sharply, there’s going to be some room for negotiation.”

Nick Leeming, chairman of property agent Jackson-Stops, mentioned: “Encouragingly, throughout the Jackson-Stops community we're seeing sturdy exercise ranges, with demand outpacing provide in in style markets. In April alone, a median of 5 potential patrons had been competing for each new itemizing, underscoring debtors’ continued dedication.”

Jeremy Leaf, a north London property agent, mentioned some potential patrons and sellers are “sitting on their palms”, including: “The current lower in mortgage charges has restored some confidence however April’s sharp rise in inflation is not going to assist.”

Common home costs elevated to £296,000 (6.7 per cent annual development) in England, £208,000 (3.6 per cent) in Wales, and £186,000 (4.6 per cent) in Scotland, within the 12 months to March, in accordance with the ONS.

The typical home worth in Northern Eire was £185,000 within the first quarter of 2025 – a 9.5 per cent annual improve.

<img src="https://static.independent.co.uk/2025/05/21/13/2c32d5b86c576c0c77da87672f9f7fbeY29udGVudHNlYXJjaGFwaSwxNzQ3OTE0NjIw-2.80239176.jpg" srcset="https://static.independent.co.uk/2025/05/21/13/2c32d5b86c576c0c77da87672f9f7fbeY29udGVudHNlYXJjaGFwaSwxNzQ3OTE0NjIw-2.80239176.jpg?quality=75&width=320&auto=webp 320w, https://static.independent.co.uk/2025/05/21/13/2c32d5b86c576c0c77da87672f9f7fbeY29udGVudHNlYXJjaGFwaSwxNzQ3OTE0NjIw-2.80239176.jpg?quality=75&width=640&auto=webp 640w" loading="lazy" alt="Line graph showing the year-on-year change in average UK private rent from April 2022 to April 2025" class="sc-1mc30lb-0 QHifS inline-gallery-btn"/> open picture in gallery

Line graph displaying the year-on-year change in common UK non-public hire from April 2022 to April 2025 (PA Graphics) Iain McKenzie, chief govt of the Guild of Property Professionals, mentioned: “We can't ignore the subdued financial backdrop and ongoing geopolitical uncertainties which can possible guarantee a extra measured tempo of development for the rest of the yr.”

Richard Harrison, head of mortgages at Atom financial institution, mentioned: “Lenders have been extremely energetic in decreasing charges.”

The ONS additionally mentioned common UK month-to-month non-public rents elevated by 7.4 per cent, to £1,335, within the yr to April. The annual development charge eased from 7.7 per cent in March.

Common rents elevated to £1,390 per thirty days (7.5 per cent annual development) in England, £795 (8.7 per cent) in Wales, and £999 (5.1 per cent) in Scotland, in April.

In Northern Eire, common rents elevated to £843 (7.8 per cent annual development) within the 12 months to February, the report mentioned.

Inside England, annual inflation in non-public rents was highest within the North East area (9.4 per cent) and lowest in Yorkshire and the Humber (4.0 per cent), in April.

Nathan Emerson, chief govt of property professionals’ physique Propertymark, mentioned: “Overwhelming demand throughout the rental sector continues to affect worth will increase for many who hire. We proceed to witness, on common, round 10 candidates for each property obtainable to hire and it is a scenario that has broadly remained stagnated throughout the final 5 years.