House price growth accelerates to 6.4%: UK HPI

Average UK house prices increased by 6.4%, to £271,000, in the 12 months to March 2025, up from 5.5% in the 12 months to February, according to the latest UK House Price Index from the ONS.

Average house prices increased by 6.7% in England, 3.6% in Wales, and 4.6% in Scotland.

The North East was the English region with the highest house price annual inflation rate, at 14.3%, and the highest monthly inflation rate of 4.2% between February and March, but the lowest average price, at £168,000. This annual rate was up from 8.5% in the 12 months to February and represents the highest annual growth and monthly growth in the North East since September 2021.

The lowest annual house price inflation was in London, at 0.8% in the 12 months to March, down from 1.4% in the 12 months to February.

Emma Cox, MD of real estate at Shawbrook, commented: “House prices rose in March, likely motivated by first-time buyers trying to complete purchases ahead of the stamp duty deadline. This was supported by interest rates recording a reduction in February, giving rise to the view that rates will continue to fall this year, albeit slowly.
 
“The question now is whether this level of activity will be sustained over the coming months. Whilst spring and summer are generally strong seasons for the housing market, wider economic concerns may give buyers cause to pause on transactions until market conditions improve."

Paresh Raja, CEO of Market Financial Solutions, said: “March was defined by heightened anticipation and activity ahead of the stamp duty changes, so the fact that this data reflects significant growth was to be expected. At that point, there was some uncertainty about whether the growth was sustainable or merely a response to short-term incentives.

“However, this uncertainty has been tempered by the recent rate cut from the Bank of England, and the improved outlook for the central Bank’s monetary policy. Inflation may have jumped to 3.5% this morning, but President Trump’s tariffs are expected to have a cooling effect on the UK economy, providing the Monetary Policy Committee the space it needs to move faster with its rate cuts. In turn, this should mean that the growth represented in the ONS’ data will become part of a longer, more enduring trend – particularly as the number of homes for sale is at a 10-year high.

“For growth to occur, however, lenders must be on hand to support borrowers and brokers as they navigate the months ahead. Pricing in the outlook for interest rates into product ranges will be a part of this, but so too will providing a high level of service and expertise, especially in regards to the new property tax landscape.”

Richard Harrison, head of mortgages at Atom Bank, added: “The stamp duty deadline has clearly played a big role in the heightened level of house price growth we have seen in recent months. Housebuyers understandably were likely desperate to get deals completed before the end of the stamp duty holiday, with Propertymark noting a sharp jump in the number of prospective buyers registering with estate agents. Vendors have been able to take advantage, and maximise the sale price.
 
“It would be a mistake to assume that the stamp duty regime returning to its previous levels will result in a drop in house prices, however. Lenders have been incredibly active in reducing rates, even before last week’s Base Rate reduction, with Moneyfacts data showing that the average two-year fixed rate is now at its lowest level since September 2022, before the mini-Budget. Coupled with product choice reaching its highest point since October 2007, the range of attractively-priced options will mean plenty of buyers are confident about proceeding with a transaction. 

“The ingredients are there for further house price growth this year and beyond, with the risk of freezing out whole groups of aspiring homeowners, such as those with modest deposits or imperfect credit ratings. It’s crucial that lenders ensure these buyers have access to the funding they need to make homeownership achievable, rather than simply a pipedream.”