The UK housing market remained stable in March, with no major changes in average house prices, according to Nationwide. Annual growth stood at 3.9%, with the North West leading at 5.9%, while London lagged behind at just 1.9%. This reflects an ongoing trend: more affordable areas are seeing the strongest growth.

Stamp Duty Changes and Buyer Activity

Activity picked up in February as buyers rushed to complete purchases before the Stamp Duty Land Tax (SDLT) deadline. Transactions were 10% above the pre-pandemic average. But this spike is expected to drop in April—especially for first-time buyers, who may now face higher costs. Zoopla estimates that 42% of first-time buyers will now pay SDLT, nearly double the previous rate.

Mortgage approvals only dipped slightly in February, but buyer demand fell sharply ahead of the tax change. According to RICS, new enquiries dropped to their lowest level since autumn 2023, suggesting a brief market slowdown.

Supply and Demand in Balance

Even with reduced buyer interest, housing stock levels remain high and continue to grow. This balance is helping ease pressure on prices and may support a more stable market in the months ahead.

Economic Uncertainty Adds Pressure

New US tariffs announced in April have shaken global markets, impacting investor confidence. While it’s too early to see the full effect on the UK housing market, weaker consumer confidence and reduced liquidity could affect buyer activity.

Affordability is a growing concern. Although mortgage rates remain steady and a Bank of England rate cut is expected in May, the rising cost of living is tightening budgets. Regulators are reviewing loan-to-income rules to help first-time buyers, but without more housing supply, this could simply drive prices up—especially in high-demand areas like London.

Rental Market Overview

Despite tenant demand dropping to a 4-year low, rents continue to rise, due to tight supply.

• UK rental growth hit 3.2% in March

• The South West and Wales saw the highest monthly increase at 0.7%

• The North West led annual rental growth at 5.8%, again showing the strength of more affordable regions.

The UK housing market is walking a fine line between stability and slowdown with the recent stamp duty changes, global economic uncertainty and rising living costs this is reshaping how buyers and renters make decisions. As we move into Q2, mortgage trends, housing supply, and consumer confidence will be key to understanding where the market is heading.