UK house prices rose 6.4% over the past 12 months – will there be a property market surge?

UK house prices rose 6.4% in the 12 months to March, according latest House Price Index from the Office for National Statistics (ONS) and Land Registry

This is up from the 5.5% increase we last saw in the 12 months to February.

The average house price now sits at £271,000 in March, which is £16,000 higher than a year ago. Between February and March, property prices rose 1.1%.

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Andrew Montlake, managing director at mortgage broker Coreco, said there was a “significant” uptick in activity levels in the months leading up to March as buyers sought to beat the stamp duty deadline, which “clearly drove up prices”.

Homebuyers have benefited from lower stamp duty bills in recent years, but the threshold at which you start paying the property tax was cut from 1 April, leading many people to try to complete purchases before the deadline.

“However with inflation edging up sharply this morning, and mortgage rates likely to follow as expectations of further base interest rate cuts reduce, this could see average values start to retreat again,” Montlake said.

The Land Registry house price index is an official data source calculated by the Office for National Statistics that captures changes in the value of residential properties. It uses sales data collected on residential housing transactions, whether for cash or with a mortgage.

Because it uses actual sales data it is generally considered the most accurate housing price index. However, it lags other indices like those provided by Nationwide, Halifax and Zoopla.

We take a closer look at the Land Registry index, which regions and types of property saw the strongest growth, and ask whether house prices will continue to rise this year.

House price growth by region

In England, average house prices in the 12 months to March increased to £296,000 (up 6.7%).

In Wales the increase was 3.6% to £208,000, and in Scotland prices rose 4.6% to £186,000.

In Northern Ireland the average house price increased in the year to the first quarter (Jan to Mar) by 9.5% to £185,000.

Of English regions, annual house price inflation was highest in the North East, where average prices increased by 14.3% in the 12 months to March to £168,227. This was followed by Yorkshire and The Humber, where prices rose 9.5% to £211,155.

London was the English region with the lowest annual inflation, where prices increased by 0.8% to £552,073.

Source: Land Registry house price index

House price growth by property type

Semi-detached properties experienced the highest annual increase in property price over the 12 months to March, increasing by 8.2% on average to £275,162 up from £254,265.

Terraced homes weren’t far behind, seeing price growth of 8% to bring the average property to £228,968, up from £211,943 a little over a year ago.

Detached homes rose in price by 5.1% to £437,325, compared to £416,298.

Lagging behind are flats and maisonette, where prices rose 3.4% to £199,520 up from £193,000.

The Land Registry data also shows a breakdown in the prices paid by first-time buyers and those who have already owned a home. First-time buyers in Great Britain paid an average price of £230,857 in March while former owner occupiers paid £331,844.

What’s the outlook for house prices in 2025?

Borrowing costs have a big part to play in how far and fast the property market moves. They have improved somewhat recently, with mortgage rates lowering following the Bank of England’s rate cuts.

But with inflation figures out this morning showing the cost of living increased more than expected in April, hopes the Bank of England would cut interest rates again soon – easing the pressure on mortgage borrowers – are fading fast.

At the same time, home buyers now have to contend with paying more in stamp duty since the April changes. For example, a first-time buyer purchasing a £500,000 property now faces a stamp duty bill of £10,000, compared with £3,750 under the previous regime.

Both these factors could stall further growth in property transactions and prices.

Karen Noye, mortgage expert at Quilter, said: “With inflation spiking to 3.5% and the economy doing better than had been feared at the start of the year, there is a chance it will hold off on further cuts for now and mortgage rates would follow suit.

“What’s more, the changes to stamp duty have added to upfront costs, particularly for those purchasing in higher-value areas. Given the now even higher cost of moving home, prospective buyers will have considerably less incentive to move, and first-time buyers may simply be priced out until they are able to build their savings to cover the higher costs.

“We are likely to see a marked slowdown in property transactions and a subsequent stalling of prices. Instead of a sharp decline, the market is more likely to stabilise due to constrained supply and ongoing affordability challenges."