UK house prices declined in April as prospective homebuyers faced significantly higher stamp duty liabilities, according to the latest data from Nationwide.
Nationwide reported a 0.6% month-on-month drop in house prices.
Analysts anticipated the market slowdown, which coincides with revised stamp duty thresholds implemented from 1 April.
While annual house price growth has also eased, homes remain 3.4% more expensive than a year ago, with the average property price now standing at £270,752.
Robert Gardner, chief economist at Nationwide, noted a “significant jump” in property transactions in March, attributing this to buyers moving swiftly to avoid higher stamp duty charges.
“The market is likely to remain somewhat subdued in the coming months,” Gardner added.
However, he suggested activity could rebound over the summer period, noting that rising incomes and the prospect of further interest rate reductions may underpin demand.
In her October Budget, Chancellor Rachel Reeves confirmed the government’s decision to lower stamp duty thresholds in England and Northern Ireland.
With the new changes effective from April, buyers now pay stamp duty on properties valued above £125,000 instead of the previous £250,000 threshold.
First-time buyers are now subject to stamp duty on homes costing more than £300,000, compared to the previous exemption for purchases under £425,000.
Nationwide’s pricing data is drawn from its own mortgage lending, excluding cash buyers and buy-to-let transactions. Approximately one third of housing sales are conducted in cash.
April’s house price drop represents the steepest monthly decline since August 2023, according to UK economist Ashley Webb at Capital Economics.
Webb observed that recent reductions in mortgage rates may stimulate housing demand in the months ahead, potentially counterbalancing the effects of higher costs linked to US president Donald Trump’s trade tariffs.
He forecasts that house prices will increase by 3.5% this year, followed by a 4.5% rise in 2026.
Mortgage lenders have entered a period of heightened competition, though the most competitive rates are typically reserved for those with larger deposits.
All major UK lenders now offer fixed-rate mortgages below 4%, but brokers caution that additional rate cuts should not be taken for granted.
Recent reports indicate more mortgages with 5% or 10% deposits are available now than at any point since the 2008 financial crisis.
This increased choice is welcomed by first-time buyers, though both house prices and borrowing costs remain elevated in comparison to much of the past 17 years.
Expectations are mounting for three additional Bank of England interest rate cuts this year, driven in part by global economic repercussions from US trade policy. Such actions could further reduce mortgage costs.
“With prospects of further rate reductions and increased lender competition, we anticipate a more dynamic market for the remainder of the year,” commented Jean Jameson of estate agency Foxtons.
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