House prices in the UK were flat during March, but up 3% year-on-year, according to the latest data from Halifax.
In the latest quarter (January to March) house prices were 2.1% higher than in the preceding three months (October to December),
According to the index the average home in the UK now costs £240,384.
Russell Galley, managing director of the Halifax, said: “The UK housing market began March with similar trends to previous months, as key market indicators showed a sustained level of buyer and seller activity.
“Overall average house prices in the month were little changed from February’s record high, while annual growth nudged up to 3%.
“These factors all underlined a positive trajectory and increased momentum in the early part of the year, with confidence rising as political and economic uncertainty eased.
“However, it’s clear we ended the month in very different territory as a result of the country’s response to the coronavirus pandemic.
“On a practical level, most market activity has been paused, with the public rightly following advice to stay at home, and estate agencies, surveyors and conveyancers temporarily closing as a result.
“With viewings cancelled and movers being encouraged to put transactions on hold, activity will inevitably fall sharply in the coming months.’
Galley also warned that it is set to become increasingly difficult to get a gauge on property prices moving forward.
He added: “It should be noted that with less data available, calculating average house prices is likely to become more challenging in the short-term.
“However, it’s still too early to properly assess what potential long-term impacts the current lockdown might have on the UK housing market.
“While there is very significant uncertainty at the moment, much will depend on the length of time it takes for restrictions to be lifted, the pressure that has been exerted on the economy in the meantime and the effect this has on consumer sentiment.
“Lenders have stepped up to offer their support, giving customers up to an additional three months to complete their home purchase at the agreed mortgage rate, alongside payment holidays for existing customers.
“We continue to have confidence in the fundamental strength of the housing market and remain ready and willing to lend on new mortgages, as well as product transfers and further advances, wherever and whenever there is demand.”
Paresh Raja, CEO of Market Financial Solutions, said that whilst there was some reassurance to be taken in the market remaining flat concerns remained for April.
He added: “The question now is whether the rate of house price growth will drop significantly in April.
“Current forecasts suggest this is likely to be the case, though this is to be expected given how lockdown measures have prevented valuations from being completed and lenders taking on new loan applications.
“I am optimistic that any decline will be momentary and should not overshadow the long-terms projections for positive house price growth over the coming years.