The UK housing market lost its spring momentum in March 2026. The Halifax House Price Index recorded a 0.5% monthly fall taking the average property value to £299,677, while London registered the sharpest regional drop — a 1.9% decline between January and February — according to HM Land Registry data published on 22 April. The reversal reflects the impact of the Middle East conflict on energy prices, mortgage costs and consumer confidence.
The headline numbers across all five indices
The five major UK house price indices — Halifax, Nationwide, HM Land Registry, Zoopla and Rightmove — show a coherent picture of stalled growth. Halifax’s annual rate slowed to +0.8% in March from 1.2% the previous month. Nationwide’s figures point to an average UK house price of £278,880 in April 2026, with annual growth at +3.0%. Land Registry data for February 2026 — the most recent on actual completed transactions — show the average UK home at £267,957, up 1.2% year-on-year and just 0.1% on the month.
London the weakest region
London has now joined the South East and South West as the only English regions recording an annual house price fall, according to ONS/Land Registry data. Stretched affordability, the prospect of a high-value council tax surcharge from April 2028 (which the Treasury says will affect around 3% of London properties), and a softer prime market following the abolition of non-dom tax status are all weighing on the capital. By contrast, Yorkshire and Humber, the North East and the North West are recording annual rises above 3%, with Northern Ireland up 9.7% in Q4 2025 according to Nationwide regional data.
Mortgage rates: the spring squeeze
The principal cause of the slowdown is the sharp rise in mortgage rates. Moneyfacts data show the average two-year fixed-rate mortgage rose from 4.83% on 1 March 2026 to 5.78% on 1 May — a 95 basis-point jump in two months, driven by gilt market repricing of Bank of England policy. Five-year fixes rose from 4.95% to 5.68%. Amanda Bryden, Head of Halifax Mortgages, said: “The recent slowdown in the housing market reflects the wide uncertainty regarding the conflict in the Middle East. Concerns about higher energy prices have pushed up inflation expectations, which in turn led to a rise in mortgage rates.”
What forecasters now expect for 2026
The major forecasters started 2026 expecting house prices to rise between 1% and 4%. Those projections are now under review. Halifax’s Amanda Bryden nonetheless reiterated the lender’s 1-3% range, citing the cushion provided by households on fixed deals, lower unemployment and the prospect of further BoE cuts later in the year. Nationwide maintained its 2-4% range. Savills trimmed its forecast to 2%. Zoopla sits at 1.5%. The HomeOwners Alliance predicts 2% nationally, but explicitly flags London as expected to see the weakest growth, held back by stretched affordability and higher stamp duty costs.
The longer view: 22% wage growth to 2029
Beyond 2026, the medium-term forecasts are markedly more optimistic. Savills expects price growth of 4% in 2027, 5% in 2028, 5.5% in 2029 and 4% in 2030, supported by an anticipated 22% increase in nominal UK wages between 2025 and 2029 and a recovery in transaction volumes from the current cyclical lows. The current sluggishness, in this reading, is a delayed adjustment to the post-pandemic rate-cycle rather than a structural break. London’s prime market — the segment most exposed to international capital flight, non-dom changes and the prospect of the council tax surcharge — remains the most uncertain piece of that puzzle.
