UK house prices slow in April as market digests stamp duty changes
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UK house price growth decreased to 3.4% on an annual basis in April, down from 3.9% in the previous month, mainly due to the effect of recent stamp duty changes and seasonal effects, according to the Nationwide House Price Index.
This was below analyst estimates of a 4.1% increase, while also being the softest house price rise since October 2024.
On a monthly basis, UK house prices fell 0.6%, which was the first decline since August 2024. In contrast, house prices remained stable on a monthly basis in March. The monthly Nationwide House Price Index came down to 539.3 in April, down from 542.4 in March.
Robert Gardner, Nationwide's chief economist, said in the April House Price Index report on the company's website: '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 also noted that the market is expected to stay slightly soft in the near future, given the pattern usually seen after the end of stamp duty holidays. However, this trend is estimated to only be short-term.
'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.'
Low unemployment and rising earnings are expected to support housing activity again in the summer. The Bank of England is also likely to announce further interest rate cuts, which should encourage buyers as well.
Pantheon Macroeconomics said in a note: '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 the company pointed out that the ongoing trade war and rapidly changing US policies could cause hurdles for house prices.
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