House price growth remained steady last month, but is expected to soften in the coming months as the stamp duty holiday comes to an end.

The average price of a home in Britain rose 3.9% to £271,316 in March, according to Nationwide. This is the same annual house price inflation recorded in February this year.

It comes as stamp duty rates change today, with the first threshold reverting back to £125,000, down from a threshold of £250,000. It marks the end of the stamp duty holiday introduced in September 2022.

It means anyone buying a property a property above this level will now pay more in stamp duty. Landlords pay a surcharge of 5%.

House price growth

Robert Gardner, Nationwide's chief economist, said: “UK house price growth remained stable in March at 3.9%, the same as in February.

There was no change in prices month-on-month, after taking account of seasonal effects.

These price trends are unsurprising, given the end of the stamp duty holiday at the end of March (transactions associated with mortgage approvals made in March, especially toward the end of the month, would be unlikely to complete before the deadline).

“Indeed, the market is likely to remain a little soft in the coming months since activity will have been brought forward to avoid the additional tax obligations - a pattern typically observed in the wake of the end of stamp duty holidays.

“Nevertheless, activity is likely to pick up steadily as the summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive.

“The unemployment rate is low, earnings are rising at a healthy pace in real terms - i.e. after accounting for inflation -, household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect.

Meanwhile, Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Latest figures from this consistently reliable snapshot of housing market activity reinforces what we have seen on the ground - the overwhelming majority of buyers and sellers who had decided to move are coming to terms with the loss of the stamp duty saving by trying to split higher costs between them.

"As a result, and with many sales brought forward, there will inevitably be fewer but more protracted transactions over the next few months. However, bearing in mind around a third of total annual stock is made available during March, April and May, prices are likely to soften, rather than correct, while that underlying strength and confidence in the market remains."

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