While average house prices fell by 1% in March on a monthly basis, following a rise of 0.3% in February, the broader data shows that prices are still increasing overall. 

The index shows that the typical UK home now costs £288,430, around £2,900 less than last month.

Northern Ireland remains the strongest performing nation or region in the UK.

Kim Kinnaird, director at Halifax Mortgages, said: “The broader picture is that house prices are up year-on-year, reflecting the opposing forces of an easing cost of living squeeze — now that pay growth is outpacing general inflation — and relatively high interest rates.

“Taking a slightly longer-term view, prices haven’t changed much over the past couple of years, moving in a narrow range since the spring of 2022, and are still almost £50,000 above pre-pandemic levels.

“Looking ahead, that trend is likely to continue.

“Underlying demand is positive, as greater numbers of people buy homes, demonstrated by recent rises in mortgage approvals across the industry and underpinned by a strong labour market.

Daniel Austin, CEO and co-founder of ASK Partners, said: “This data shows that the property sector is showing signs of recovery and the outlook has considerably improved.

“In the realm of commercial real estate, factors like physical condition, location, and age significantly influence a property's value.

“Well-maintained properties boasting modern amenities tend to command higher prices, while neglected ones may struggle to attract tenants or investors.

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“In the current market, the emphasis has shifted towards the importance of location and quality over the yield on debt or cost.

“We anticipate opportunistic acquisitions of prime properties in prime locations."

Amy Reynolds, head of sales at Antony Roberts, added: “While it’s too early to say if there’s going to be a traditional post-Easter bounce for family houses, we have noticed flats are performing better than in a long time with an increase in first-time buyer activity, which is crucial for a healthy market.
 
“This is mostly down to the generosity of the bank of mum and dad, as this rebound in first-time buyer activity would not have been likely without parental assistance, particularly in London and the Southeast.”

Tomer Aboody, director at MT Finance, says: "With a continued positive outlook, as buyers take advantage of lower and stable interest rates, we are continuing to see more transactions with demand high.

"With further potential lower inflation, and with rumours that interest rates might also reduce, we are likely to see an increase in demand as the year moves on.”

Mark Harris, CEO at SPF Private Clients, commented: “Business is brisk, as optimism over the direction of mortgage rates prevails and buyers and sellers demonstrate more willingness to transact.

“Assuming inflation continues to fall towards its 2% target, the first interest rate reduction could come as early as the summer, which will further boost confidence and activity."

Anna Clare Harper, CEO at GreenResi, concluded: “UK house prices increased by 0.3% annually in March, according to Halifax.

"This is positive news for many, as upward movement in the housing market is generally seen as a good thing.”