UK house prices declined for the first time in six months in March, data published by the mortgage lender Halifax showed Friday.

House prices dropped 1.0 percent on a monthly basis in March, in contrast to the 0.3 percent rise in February. This was the first decrease since September. Prices were expected to climb 0.3 percent.

On a yearly basis, house price growth eased to 0.3 percent from 1.6 percent in the prior month. Prices were expected to climb 1.5 percent.

A typical house now costs GBP 288,430, which was around GBP 2,900 less than last month.

Despite the fall, house prices have shown surprising resilience in the face of significantly higher borrowing costs, Halifax Mortgages Director Kim Kinnaird said.

Affordability continues to be a challenge for prospective buyers, while existing homeowners on cheaper fixed-term deals are yet to feel the effect of higher interest rates. Accordingly, the housing market has not adjusted fully.

Kinnaird said the underlying demand is positive and as rental costs are rising at record rates, home ownership continues to be an attractive option.

However, Kinnaird added that the housing market remains sensitive to the scale and pace of interest rate changes, and with only a modest improvement in affordability on the horizon, this will likely limit the scope for significant house price increases this year.

UK house prices declined unexpectedly in March as higher interest rates continue to damp affordability, data published by the Nationwide Building Society revealed Tuesday.

The house price index posted a monthly fall of 0.2 percent in March, in contrast to the 0.7 percent rise in February and confounding the forecast of 0.3 percent gain.

House prices dropped for the first time in three months.

However, on a yearly basis, house price inflation advanced to 1.6 percent from 1.2 percent a month ago.

Nationwide Chief Economist Robert Gardner said mortgage approvals was about 15 percent below pre-pandemic levels, largely reflecting the impact of higher interest rates on affordability.

However, consumer sentiment is improving amid easing cost-of-living pressures, Gardner observed. There were reports of pickup in new buyer enquiries and new instructions to sell in recent months.

Housing affordability is improving, albeit gradually with income growth continuing to outpace house price growth by a healthy margin, he noted.

“If these trends are maintained, activity is likely to gain momentum, though the pace of the recovery is still likely to be heavily influenced by the trajectory of interest rates,” said Gardner.

Data today showed that house prices increased 1.1 percent in the first quarter from the previous three months.