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UK house prices fell in March, according to Halifax, reflecting a cooling in the market as the stamp duty tax break comes to an end.
The average UK house price registered a 0.5% dip from the previous month, or £1,575 in cash terms, leaving the average cost of a home at £296,699, according to the lender. Prices were up 2.8% from March last year, unchanged from the annual rate in February.
Amanda Bryden, head of Mortgages at Halifax, said: “House prices rose in January as buyers rushed to beat the March stamp duty deadline. However, with those deals now completing, demand is returning to normal and new applications slowing.
"Our customers completed more house sales in March than in January and February combined, including the busiest single day on record. Following this burst of activity, house prices, which remain near record highs, unsurprisingly fell back last month.
“Looking ahead, potential buyers still face challenges from the new normal of higher borrowing costs, a limited supply of available properties to choose from, and an uncertain economic outlook."
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Regionally, Northern Ireland saw the most substantial annual growth, with prices rising 6.6% in March — the average house there now costs £206,620.
Scotland followed closely, with a 4.3% price rise from 3.8% in February. The average price in Scotland is now £213,750.
Wales saw a 3.7% increase in prices to an average of £227,332.
Yorkshire and Humberside recorded a solid 4.2% annual increase, with properties now costing an average of £215,807.
London, however, experienced the slowest growth, with prices rising only 1.1% year-on-year in March, down from 1.5% in February. Despite this, the capital still boasts the highest average house price in the UK, at £543,370.
Alice Haine, a personal finance analyst at Bestinvest, said: "The more subdued activity in March follows a surge in demand at the end of last year when buyers raced to get deals across the line in a bid to avoid a heavier tax bill.
"First-time buyers are likely to be stung the most by the stamp duty threshold changes as they now not only need to raise a deposit but must also find extra cash to fund a higher tax bill.
“Homebuyers are likely to be reassessing their options much more carefully now, as they have not only missed the boat to secure lower property tax charges but must also contend with a very uncertain economic outlook.
"Affordability levels may have improved slightly thanks to easing mortgage rates – a result of three interest rate cuts since August last year – along with resilient wage growth, but April is proving to be a challenging month."