"While the suspension of this index until further notice makes sense, there were some real positive signs leading up to April, with good levels of transactions and values."
Broken down by country, house prices increased over the year by 2.2% in England, 1.1% in Wales, 1.5% in Scotland and 3.8% in Northern Ireland.
London was the English region with the highest annual house price growth, with prices increasing by 4.7% to £486,000 in the year to March 2020, up from 3.0% in February 2020. This is the largest 12-month growth London has seen since December 2016.
The lowest annual growth was in Yorkshire and The Humber, where prices decreased by 1.0% over the year to March 2020.
On a non-seasonally adjusted basis, average house prices in the UK decreased by 0.2% between February and March, compared with a decrease of 0.3% in the same period a year ago. On a seasonally adjusted basis, average house prices in the UK increased by 0.1% over the month, following a decrease of 0.1% in the previous month.
The ONS noted that due to government lockdown measures, fewer transactions are available than expected for the March UK HPI. As a result, it says there may be "increased volatility in this month’s estimates, particularly at the lower geographical levels where transaction volumes are smaller".
As the Index is based on completed housing transactions, the ONS announced that the UK HPI will be suspended until further notice from the April 2020 index.
Tomer Aboody, director of MT Finance, said: "While the suspension of this index until further notice makes sense, there were some real positive signs leading up to April, with good levels of transactions and values. This was all part of the positive UK outlook post-general election and the getting on with Brexit.
"With the government allowing the market to re-open, enabling agents and valuers to access properties once more, this has resulted in most lenders returning with mortgage offerings similar to those on offer pre-lockdown. Hopefully, this will gain traction going forward, which along with government stimulus and assistance should see a steadier level of activity in the market in the final half of the year."
Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: "The historic nature of this albeit comprehensive survey of house prices reflects sadly the calm before the storm and the steady build up in transactional activity in run up to lockdown.
"Not surprisingly, this is the last of these reports for a while until sales begin to pick up and certainly on the ground we are finding that although activity is starting to gain momentum now we are returning to work, it will be some time before it is sufficient to give some credence to these numbers.
"Certainly they will be looked at closely by those valuers who are struggling to establish the new normal and are desperately in search of data to back up their opinions."
Lucy Pendleton from James Pendleton estate agents added: “Enquiry levels are off the chart at the moment and we are gradually bringing back more staff. Those who have already returned from being furloughed have been using words like ‘frantic’, which is a great sign.
“Only time will tell how we can convert those enquiries and how that translates into all-important prices for vendors. However, it’s significant that London was clearly powering ahead in March as the pandemic tightened its grip, with annual growth higher than at any point in the past three years. That tells you all you need to know about how prices should weather this storm, particularly in the capital which tends to inform what happens elsewhere in the country, albeit with a bit of a lag.
“London’s 4.7% price jump in 12 months was delivered by a decisive election, a Boris Bounce and decidedly muted exit from the EU. The key here is that all of those things have long-term significance. The pandemic, on the other hand, is a short-term tragedy. Life will eventually return to some kind of normal, and the fundamentals of supply and demand in the UK market, particularly in London, will not have changed.”
