UK house prices declined in April as prospective buyers faced higher stamp duty charges, according to the latest data from Nationwide.
The building society reported a 0.6% month-on-month drop in prices.
This cooling of the housing market was widely anticipated, following revisions to stamp duty thresholds that took effect on April 1.
While annual house price growth also slowed, homes remain 3.4% higher in value compared to a year ago, with the average property now costing £270,752.
Nationwide’s chief economist, Robert Gardner, highlighted a “significant jump” in transactions during March, as buyers sought to complete purchases ahead of the introduction of increased stamp duty costs.
“The market is likely to remain somewhat subdued in the coming months,” Gardner noted.
However, Mr Gardner predicted a rebound in activity later in the summer, driven by rising incomes and expectations of further interest rate reductions.
Chancellor Rachel Reeves announced in her October Budget that the government would lower stamp duty thresholds for England and Northern Ireland.
The changes, implemented in April, require buyers to pay stamp duty on homes costing more than £125,000, down from the previous £250,000 threshold.
First-time buyers are now liable for stamp duty on properties above £300,000, whereas the previous threshold was £425,000.
Nationwide’s house price index is based solely on its own mortgage lending and does not capture cash transactions or buy-to-let purchases; cash buyers represent about a third of all housing market transactions.
The decline in April marks the largest monthly price fall since August 2023, according to Ashley Webb, UK economist at Capital Economics.
Webb stated that easing mortgage rates would support a pickup in demand in the months ahead, potentially offsetting any consumer caution linked to price increases fuelled by US president Donald Trump’s proposed trade tariffs.
Mr Webb forecasts house prices will grow by 3.5% in 2024 and by 4.5% in 2026.
Fierce competition among mortgage lenders has sparked a mini price war, although the best rates often require substantial deposits from borrowers.
All major UK banks now offer fixed-rate mortgages below 4%, yet brokers caution that further cuts are not assured.
Recent data reveals more low-deposit mortgages at 5% or 10% are available now than at any point since the 2008 financial crisis.
This expanded choice provides some relief for first-time buyers, despite prices and rates remaining elevated by historical standards.
Expectations are mounting that the Bank of England may cut interest rates a further three times this year, a response to global repercussions from new US trade tariffs, possibly reducing mortgage costs.
“With the prospect of further rate reductions and increased lender competition, we expect the market to gain momentum as the year progresses,” commented Jean Jameson, of estate agent Foxtons.
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