The UK housing market continues to show resilience as we move through March 2026, although there are clear signs that conditions are beginning to shift. While there are fewer buyers in the market compared to this time last year, those who remain are still proceeding with purchases, meaning sales levels are holding steady for now.

However, rising mortgage rates are starting to introduce more caution, making realistic pricing more important than ever for sellers.

A steady market, but signs of change

The average UK house price now stands at £270,500, representing an annual increase of 1.3% or approximately £3,540 over the past year. While this reflects stable growth, the pace remains modest as affordability continues to influence buyer behaviour.

Looking more closely at property types, flats and maisonettes are currently averaging around £191,800, reflecting a slight annual decline of 1.1%. Terraced homes are performing more strongly, with average values reaching approximately £240,200, up by around 2.0% year-on-year.

Semi-detached properties are seeing even stronger growth, now averaging £279,200, which represents an increase of 2.4% over the past year. Detached homes, meanwhile, have reached an average of £455,000, showing a more modest annual increase of 1.3%.

Mortgage rates begin to impact demand

One of the biggest shifts this month has been the rise in mortgage rates. Average rates have increased by around 0.4 percentage points in recent weeks and many deals below 4% have now been withdrawn.

This change is beginning to influence buyer confidence. While transactions are still progressing, more buyers at the early stages are taking a step back, adopting a “wait and see” approach as borrowing costs rise and wider economic uncertainty remains.

Despite this, sales agreed are holding relatively firm. This is largely being supported by buyers who already have mortgages in place or are less sensitive to interest rate changes.

Fewer buyers, but more committed ones

Over the past three months, buyer demand has consistently tracked below last year’s levels and in March it is running approximately 13% lower than the same time last year.

Interestingly, this hasn’t translated into a significant drop in completed sales. Sales agreed are currently just 2% lower year-on-year, highlighting a shift in the type of buyer currently active in the market.

There are fewer buyers overall, but those who remain tend to be more serious and better prepared. These are typically buyers with finances already arranged or those with a clear need to move, rather than those casually exploring their options.

This group of committed movers is currently underpinning market activity.

Supply levels support ongoing transactions

Another key factor supporting the market is the level of available stock. There are currently around 6% more homes for sale than a year ago, giving buyers greater choice and encouraging ongoing activity.

A significant portion of transactions is also coming from less mortgage-dependent buyers. Around 25% of purchases are being made with cash, while many existing homeowners are benefiting from accumulated equity, allowing them to move with less reliance on borrowing.

This is helping to sustain sales in the short term, although it also highlights how the market is becoming increasingly reliant on a smaller, more committed group of buyers.

A consistent pattern across the UK

This trend of reduced demand but stable sales is being seen across most regions of the UK. Buyer enquiries are down across all areas compared to last year, although the scale of decline varies.

In contrast, sales activity remains relatively stable, with some areas even seeing small increases. This reinforces the idea that while overall demand has softened, the market is still functioning due to motivated buyers who are ready to proceed.

House prices remain stable for now

Despite softer demand, house price inflation has remained steady at 1.3% annually.

Price movements continue to vary by region, with more affordable areas generally seeing stronger growth. Meanwhile, price declines in southern England have started to stabilise after previous drops.

At present, the reduction in buyer demand has not yet had a significant impact on pricing. For house prices to fall more noticeably, weaker demand would need to persist and translate into a more substantial drop in sales activity.

What happens next?

Looking ahead, the housing market remains active, but it is becoming more sensitive to changes in mortgage rates and the wider economic outlook.

If mortgage rates stabilise, current levels of activity are likely to continue. However, if borrowing costs rise further, this could reduce demand more significantly and eventually impact sales volumes.

For buyers, the current market offers less competition than last year, along with greater negotiating power due to increased supply. However, affordability remains a key challenge, particularly for those relying on larger mortgages.

For sellers, the message is clear. Well-priced homes are still selling, but buyers are more selective. With a smaller pool of active buyers, pricing correctly from the outset is critical. Overpriced properties are far more likely to sit on the market and struggle to attract interest.