UK house prices dipped by 0.6% on average in April compared with a month earlier, according to a building society, as the market cooled slightly after the rush to beat changes to stamp duty in England and Northern Ireland.
Across the UK, the annual rate of house price growth slowed to 3.4% in April, from 3.9% in March, taking the average property value in April to £270,752, Nationwide said.
Robert Gardner, the building society’s chief economist, said: “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.”
Temporary cuts to stamp duty in England and Northern Ireland came to an end at the start of April, after the announcement by the chancellor, Rachel Reeves, in her October budget. Scotland and Wales set different taxes on house purchases.
Nationwide expects the housing market to remain subdued in the coming months, as is usually the case after the end of stamp duty holidays.
However, the building society is predicting that demand for buying and selling will pick up steadily during the summer despite the wider uncertainties in the global economy, as conditions remain supportive for potential homebuyers.
“Unemployment remains low, earnings are rising at a healthy pace in real terms (after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if (the Bank of England base rate) is lowered further in the coming quarters as we and most other analysts expect,” Gardner said.
The UK’s inflation rate dropped to 2.6% in March, which has increased pressure on Bank of England policymakers to cut interest rates next month, even at a time when the global outlook remains uncertain as a result of Donald Trump’s tariff wars.
Lenders including Barclays and HSBC have announced more mortgages with rates below 4% this week, as part of their wider mortgage rate reductions.
Rightmove’s mortgage expert Matt Smith said: “I think lenders are now biding their time until the 8 May (Bank of England base rate) decision, and will likely use what will hopefully be a second cut of the year as an opportunity for further reductions.”
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Despite the expectation that the Bank may cut interest rates in May, estate agents warn that some potential homebuyers, including first-time buyers, are still finding it hard to afford a home.
While this offers some breathing room for households, underlying affordability issues remain a major hurdle, particularly for first-time buyers navigating higher borrowing costs and reduced government support.
“In many high-cost areas, house prices remain out of reach for a significant share of aspiring buyers,” said Jonathan Handford, a managing director at the estate agent group Fine & Country. “Stricter lending rules and large deposit requirements continue to shut many out of the market despite signs that broader financial conditions may improve,” he said.
