20 May 2026
If you are covering the latest UK House Price Index, please see the following comment from Ian Futcher, financial planner at Quilter:
UK house prices softened again in March, with the UK House Price Index showing a 0.4% monthly fall and annual growth flat , leaving the average price at £268,000. In England, prices were down 0.5% on the month and 0.6% year on year, confirming that momentum has faded.
London continues to stand out as the weakest major market. Prices in the capital were down 2.1% year on year, the poorest performance of any English region, underlining how stretched affordability remains at higher price points. Even with only modest monthly moves, London is clearly bearing the brunt of tighter borrowing conditions, with buyers far more sensitive to mortgage costs than in cheaper regions.
It is also important to put this data in context as the data set is based on completed transactions, and with a typical 6–8 week gap between agreeing a deal and completion, March’s figures largely reflect decisions taken earlier in the year. Crucially, these slightly depressed readings were recorded at a point when affordability was actually improving somewhat, as mortgage rates had eased back and confidence was stabilising.
This was also the first full month of the Iran war, which quickly injected new global uncertainty into markets. Since then, expectations around interest rates have shifted again, pushing mortgage pricing higher, even though rates have since come down from their peaks.
The risk looking ahead is that transactions being agreed more recently are facing a tougher affordability backdrop than the one reflected in this data. That points to continued pressure on activity and pricing in the near term, with London and other high‑value markets likely to remain the most exposed if borrowing costs stay elevated. At least in the short term, and until there is meaningful progress on the war in Iran, house prices are likely to remain depressed and volatile, reflecting the affordability pressures this situation continues to create.
