UK house prices recorded modest gains in March even as borrowing costs jumped and housing market activity cooled, according to data aggregated in J.P. Morgan’s April UK Housing Pulse.
Price moves and asking levels
Nationwide reported a 0.9% month-on-month rise in average house prices in March, taking the national average to £277,186, and lifting annual growth to 2.2% from 1.0% in February. Rightmove’s asking price index also rose, up 0.8% month-on-month to £371,042, though that metric remained 0.2% lower than a year earlier.
"March has brought a typical seasonal lift in prices, and 'steady rather than strong' is how I’d describe the start of this year’s spring market," said Colleen Babcock, Rightmove property expert.
Activity and approvals
Market activity softened in parallel with rising mortgage costs. Housing transactions fell 5.4% year-on-year in February to 102,410, while Bank of England and Office for National Statistics data show mortgage approvals declined 4.0% year-on-year to 62,584.
Mortgage rates
J.P. Morgan’s live mortgage tracker showed substantial increases in fixed-rate pricing. As of April 13, 2-year fixed rates at major lenders averaged 5.03%, up 127 basis points since February. Five-year fixed rates averaged 5.03% as well, up 111 basis points over the same interval, according to the company data.
Survey signals from RICS
The Royal Institution of Chartered Surveyors (RICS) reported mixed signals in its March survey. Price expectations for the next three months fell to 43 from 19 in February, while the 12-month price balance dropped to 2 from 33. New buyer enquiries declined to 39, which RICS described as "the weakest return for the survey’s measure of buyer demand (in net balance terms) since August 2023."
J.P. Morgan economists said they expect the April RICS survey to show some improvement following comments from Bank of England Governor Andrew Bailey on April 1 that markets pricing in rate hikes were "getting ahead of themselves." J.P. Morgan now projects one Bank of England rate hike in June, taking the policy rate to 4.0%, followed by two cuts in 2027 that would lower rates to 3.5%.
Supply-side and construction trends
On the supply side, England housing starts rose 19% year-on-year in the 12 months to December 2025. Completions, however, fell 7.7% over the same period to 142,010, based on ONS figures. The BCIS House Rebuilding Index, a measure of build cost inflation, stood at 3.8% in March, marginally down from 3.9% in February.
UK average weekly earnings rose 4.1% year-on-year in January, according to Bloomberg-sourced data included in the compilation.
Housebuilder cost exposures and comments
Housebuilders reported varying degrees of exposure to cost pressures. Barratt Redrow said on April 15 that delivery charge discussions have been more prevalent than outright cost increases, and noted industry capacity is greater now - around 200,000 completions - compared with roughly 250,000 when Russia invaded Ukraine, which the company views as providing a buffer.
Bellway reported build cost inflation of 1% to 2%, with supplier agreements fixed for 12 months at the start of FY26. Vistry warned on March 4 that a sustained Middle East crisis "could easily lead to a 5% increase in build costs." Persimmon said hedging is in place at 75% of its largest suppliers.
Taylor Wimpey said manufacturers requested material price increases of 5% to 10% in January, with most requests offset or deferred, and that it expects overall low-single-digit inflation above 1% for 2026, according to company conference call material.
Valuation and forecasts
J.P. Morgan estimates the sector’s price-to-TNAV multiple has fallen below its 2022 trough. Third-party price forecasts for 2026 cited in the roundup range from Zoopla’s 1.5% to Knight Frank’s 3.0%, per company data included in the materials.
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