UK house prices experienced a slowdown in April, with annual growth falling to 3.4%, down from 3.9% in March, following the recent stamp duty changes.
This marks the softest growth in house prices since October 2024, according to the Nationwide House Price Index. The decline was mainly attributed to the impact of the stamp duty changes, as well as seasonal trends.
The April data showed a 0.6% monthly decrease in house prices, marking the first such drop since August 2024. In comparison, house prices were stable on a monthly basis in March. The Nationwide House Price Index dropped to 539.3 in April, from 542.4 in March.
Robert Gardner, Nationwide’s chief economist, explained in the April House Price Index report: “The softening in house price growth was to be expected, given the changes to stamp duty at the start of the month. Early indications suggest there was a significant jump in transactions in March, with buyers bringing forward their purchases to avoid additional tax obligations.” He added that, despite the expected short-term softness in the market following the stamp duty changes, the trend is expected to reverse as the year progresses.
“Activity is likely to pick up steadily as summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive,” Gardner noted. Factors such as low unemployment, rising wages, and the potential for further Bank of England interest rate cuts are expected to provide ongoing support for housing activity.
Pantheon Macroeconomics also weighed in, stating: “The 20-month low in month-to-month house price inflation is an eye-catcher, but we remain constructive on house prices. Bigger picture, we think that strong fundamental demand for housing, weak supply, and steady economic growth will mean that house prices continue to rise in 2025.” However, they cautioned that external factors, such as the ongoing trade war and shifting US policies, could present challenges for the housing market.
