UK house prices fall for the first time in three months

The UK housing market was "subdued" in March with prices edging down on the previous month as high mortgage rates continued to affect the market, according to Nationwide building society.

- Jack Simpson

It is the first time in three months that house prices have fallen, after gains of 0.7% in the previous two months. The average price of a home fell 0.2% from February to March, to £261,142, after a seasonal adjustment to the figures.

However, March's figure was up by 1.6% on the same month last year, a step up in pace on February's annual change of 1.2%.

Robert Gardner, Nationwide's chief economist, said: "Activity has picked up from the weak levels prevailing towards the end of 2023 but remain relatively subdued by historic standards. For example, the number of mortgages approved for house purchase in January was about 15% below pre-pandemic levels. This largely reflects the impact of higher interest rates on affordability."

Mortgage rates have dropped significantly from the middle of last year, when a typical five-year deal had risen above 5.5%. Figures from Nationwide indicated that the average was down below 4.5%.