Nationwide’s latest house price index reveals modest movement in March, with annual house price growth picking up to 2.2%, from 1.0% in February, and prices rising by 0.9% over the month, bringing the average UK house price to £277,186.
The data shows that two of the 13 regions saw annual price declines – the weakest performing region was Outer South East (-0.7% year-on-year), followed by East Anglia (-0.4%). In addition, another three regions recorded annual growth of less than 1% (West Midlands, East Midlands and the South West).
At the other end of the spectrum, Northern Ireland continued to outpace the rest of the UK by a wide margin, with prices increasing by 9.5% over the year. This was more than six times faster than the 1.5% recorded in the UK as a whole (in Q1) and nearly three times higher than the 3.3% recorded in the next strongest region (North West). This strong performance mirrored that in the border regions of Ireland over the same period.
Scotland saw a pickup in annual house price growth in Q1 to 3.0%, from 1.9% in Q4 2025. This was closely followed by Wales, where prices were up 2.7% year-on-year.
England saw a further slowing in annual house price growth to 0.9%, from 1.2% in Q4. Average prices in Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands) were up 1.5% year on year, with the North West (which includes areas such as Cheshire, Lancashire & Greater Manchester) remaining the top performing region in England – with prices up 3.3% year-on-year.
Average house price growth in Southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) remained steady at 0.6%. London was the strongest southern region, with an annual price rise of 1.7%, up from 0.7% last quarter. Meanwhile, East Anglia and the Outer South East both saw small annual declines.
Robert Gardner, Nationwide's chief economist, said: “The pickup in house price growth suggests that the market had regained momentum after the slowdown recorded around the turn of the year. However, the sharp rise in global energy prices in response to developments in the Middle East represents a significant shock to the global economy, clouding the outlook.
“In the near term, UK economic growth is likely to be slower and inflation higher than previously expected, although ultimately the impact will depend on the duration of the shock as well as the policy response. The outlook for interest rates is particularly uncertain and dependent on whether the demand or supply side of the economy is more adversely affected.
"Nevertheless, financial market expectations for the future path of Bank Rate have shifted dramatically. Towards the end of March, three interest rate increases were priced in over the next twelve months, compared to two rate cuts being anticipated before the strikes on Iran. This shift has resulted in a sharp rise in longer term interest rates (swap rates) that underpin fixed rate mortgage pricing.
“If sustained, this could reverse some of the improvement in housing affordability that has taken place in recent years. With consumer sentiment also likely to be dented by the uncertain outlook and the prospect of rising energy costs, housing market activity is likely to soften."
Jason Tebb, president of OnTheMarket, commented: “This data shows just how much market activity and sentiment continued to pick up at the start of this year, with buyers and sellers proceeding with their moves with more clarity and confidence.
"While interest rate rises, rather than previously-expected reductions, seem increasingly likely depending on inflationary pressures, six interest rate cuts in the past 20 months have greatly assisted affordability and put borrowers in a stronger position.
"Those who have already delayed the decision to move for various reasons are actively engaged in the market and are pressing on despite the Middle East conflict, with our own property sentiment index showing that buyers and sellers are adopting a more pragmatic outlook rather than a loss of confidence."
Karen Noye, mortgage expert at Quilter, added: “Today’s figures capture the early stages of the repricing that has taken place in mortgage markets since the start of the Iranian conflict. While some resilience in house prices appears to have remained for now, momentum will likely soften in the months ahead as higher mortgage rates and increased economic uncertainty weigh on buyer confidence.
“Expectations of easing borrowing costs and gradually improving affordability had been supporting activity at the start of the year, but any real progress has been rapidly undone in the last month. Since the start of the conflict, mortgage rates have risen sharply and lenders have been withdrawing products or repricing fixed rate deals at short notice. For prospective home buyers and movers, this has meant a rapid deterioration in affordability.
“First-time buyers are likely to feel this most acutely, given their sensitivity to changes in rates and stress testing, but it also risks dampening activity further up the chain as existing homeowners delay moving plans in the face of higher borrowing costs. The full effect of higher borrowing costs, weaker confidence and tighter household budgets will take time to feed through, but we can expect the housing market to be stuck in a holding pattern unless anything changes soon."
