Annual house price growth halves as buyers reach stamp duty cliff edge
The average UK house price increased by 3.5% in the 12 months to April, halving from 7.0% annual growth recorded in March this year.
Stamp duty discounts became less generous for some home buyers from April. Stamp duty applies in England and Northern Ireland.
Aimee North went on to say: (quote 2 of 3) pic.twitter.com/2WHaXc3THN
— Office for National Statistics (ONS) (@ONS) June 18, 2025
The report said: 'This is the first slowing of UK annual house price inflation since December 2023.
'This was caused by a price fall between March 2025 and April 2025, which coincided with stamp duty land tax (SDLT) changes.'
Average house prices increased to £286,000 (3.0% annual growth) in England, £210,000 (5.3%) in Wales, and £191,000 (5.8%) in Scotland in the 12 months to April 2025.
The average house price for Northern Ireland was £185,000 in the first quarter of 2025 – a 9.5% increase annually.
Within England, the North East had the highest house price inflation in the 12 months to April, at 6.4% – although this was a significant slowdown from 15.3% in the 12 months to March.
Annual house price inflation was lowest in England in the South West, at 0.9% in the 12 months to April, reducing from 5.9% in the 12 months to March.
London was the only English region where the house price annual inflation rate was higher in April (3.3%) than in March (0.9%).
ONS head of housing market indices Aimee North said: 'UK annual house price inflation slowed in April, following changes to stamp duty land tax in England and Northern Ireland. The average home in the UK now costs around £265,000.
The Consumer Prices Index (CPI) rose by 3.4% in the 12 months to May 2025, compared with 3.5% in the 12 months to April.
Read the full article ➡️ https://t.co/m9vpk5oFn3 pic.twitter.com/DtOjwdagzv
— Office for National Statistics (ONS) (@ONS) June 18, 2025
'The North East once again showed the highest annual increase, and the South West showed the lowest annual growth. London was the only English region where annual inflation rose this month.
'The rental market continues to cool, with the fifth month of slowing average annual growth across the UK. Private rent prices in Scotland grew at their slowest annual pace in three years.'
The figures were released on the same day that the ONS said that the rate of Consumer Prices Index (CPI) inflation was 3.4% in May. Many economists had been expecting the CPI rate to come in at 3.3% for the month.
Meanwhile, the average private rent in the UK was £1,339 per month in May 2025, according to ONS figures. This was 7.0% or £87 higher than 12 months ago.
The average rent for England was £1,394 in May – a 7.1% (£92) annual increase.
In Wales, rents averaged £799 in May, up by 8.5% (£63) compared with a year earlier.
The average rent in Scotland was £999 in May 2025. This was an increase of 4.5% (£43) compared with a year earlier.
The ONS said that Northern Ireland private rents figures are only available up to March 2025. The average rent in Northern Ireland was £848 in March 2025. This was up by 7.7% (£61) annually.
Jonathan Handford, managing director at estate agent group Fine & Country, said: 'While the recent (Bank of England base) rate cut offered a degree of financial relief, elevated borrowing costs are still dampening activity, particularly at the more affordable end of the market. Transaction levels also remain subdued, highlighting the property sector's sensitivity to economic signals and household finances.'
Tom Bill, head of UK residential research at Knight Frank said: 'The UK housing market is still in recovery mode after the stamp duty cliff edge in April but prices are being kept firmly in check by an overhang of supply.
'We don't expect a rate cut before August but the weak state of the UK economy is putting downwards pressure on mortgage rates, which should support demand in the short-term.'
Kevin Roberts, managing director, mortgage services, L&G highlighted a recent wave of innovative mortgage products.
He said: 'Our broker data shows that first-time buyers are particularly active, accounting for nearly 60% of purchases since the start of the year.'
Jeremy Leaf, a north London estate agent said rent rises 'are supported by lack of stock and urgent need for accommodation from tenants who are finding lack of choice hard to deal with'.
Sarah Coles, head of personal finance, Hargreaves Lansdown said: 'For anyone hoping to get onto the property ladder, there's little hope that property prices will fall to make your life easier.
'It means it's worth investigating any help you can get – whether that's the Government bonus from the Lifetime Isa, a family mortgage, or more help from the bank of mum and dad.'
Richard Donnell, executive director of research at Zoopla said: 'We expect the rate of rental inflation to slow in the coming months which will be welcome news for renters. Rental inflation for those taking new tenancies are rising at their slowest rate for four years.
'The big decline in the rate of house price inflation reflects the ending of the stamp duty holiday which is now filtering through into slower price growth.
'We expect the rate of price growth to slow further over 2025 as home buyers face a large choice of homes for sale which will support a buyers market. Home prices in the Midlands, northern England and Scotland will continue to rise more quickly than across southern England where affordability is a drag on price rises.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South Wales Argus
13 minutes ago
- South Wales Argus
Bank of England ‘unlikely' to cut interest rates as inflation pressure grows
Most economists think the Bank of England's Monetary Policy Committee (MPC) will opt to keep rates on hold when it meets on Thursday. The MPC has voted to cut rates at every other meeting since it started easing borrowing costs last August, from a peak of 5.25%. This has been possible while the rate of UK inflation has been steadily falling from the highs reached in 2023, at the peak of the cost-of-living crisis. Interest rates are used as a tool to put a lid on unruly inflation, in line with the Bank's task of keeping the rate of Consumer Prices Index (CPI) at 2%. However, rising food prices have been putting pressure on overall inflation recently, with the latest data from the Office for National Statistics (ONS) showing food and non-alcoholic drink prices rose by 4.4% in the year to May. This was the highest level in more than a year, with items like ice cream, coffee, cheese and meat spiking last month. Chocolate prices soared by nearly 18% annually, a record jump for the confectionery. The overall CPI rate came in at 3.4% in May, slightly higher than the 3.3% rate most economists had been expecting. Monica George Michail, associate economist for the National Institute of Economic and Social Research (Niesr) said the institute was forecasting inflation to remain above 3% for the rest of the year amid 'persistent wage growth and the inflationary effects from higher Government spending'. 'Additionally, the current tensions in the Middle East are causing greater economic uncertainty,' she said. 'We therefore expect the Bank of England to keep rates on hold this Thursday and implement just one further cut this year'. Sandra Horsfield, an economist for Investec, said the Bank of England is likely to be encouraged by services inflation dropping to 4.7% in May, from 5.4% in April. UK interest rates were cut to 4.25% in May (PA Graphics) This could indicate that higher employer national insurance contributions, which rose in April, have not been passed onto consumers to the extent that policymakers had feared, she said. But Ms Horsfield said 'other uncertainties remain, not least with respect to US tariffs and the indirect impact this will have on UK firms'. 'The risk to energy prices has clearly intensified and moved up the agenda given developments in the Middle East,' she said. 'It seems unlikely the MPC will want to change policy rates this week. 'But we think Wednesday's data keep another rate cut at the subsequent MPC meeting in August firmly on the table.'
Scottish Sun
17 minutes ago
- Scottish Sun
Major UK supermarket slashes price of 80 grocery staples including chocolate, ice cream & vegetables to match Aldi
The retailer slashed its hummus pots to just 99p AISLE TAKE IT Major UK supermarket slashes price of 80 grocery staples including chocolate, ice cream & vegetables to match Aldi Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) A MAJOR British supermarket is slashing its prices in its stores and online, giving customers major savings on its most popular items. The retailer has added 80 grocery staples to its well-loved Aldi Price Match in a bid to match the discount retailer. Sign up for Scottish Sun newsletter Sign up 6 The supermarket giant launches bold strategy to match Aldi Credit: Reuters 6 6 The retailer has included 80 grocery staples in its recent price drop Credit: Alamy Tesco has included a wide range of products as part of the new programme including many its private label items. The price of Tesco hummus pots has dropped to 99p alongside many other summer essentials such as fresh produce, like iceberg lettuce for 64p, baby tomatoes lowered to 78p and onions reduced to 35p. Frozen goods have also had the same treatment, with fish and steak included in the programme. But customers, who will be wanting something to keep cool over a hot summer, will be pleased to know that a three-pack of milk chocolate ice creams is now only £1.39, and a 4-pack of strawberry and vanilla ice cream will cost only £1.25. READ MORE ON TESCO WEED IT OUT Tesco's 69p buy kills moss in just 24 hours & turns your lawn a luscious green 6 Inflation continues to affect food prices as rates increased to 4.4% in May, according to the Office for National Statistics (ONS) Credit: Getty Tesco chief commercial officer Ashwin Prasad said: 'We are absolutely committed to providing great value for Tesco customers, and we have carefully chosen more than 80 additional products to add to our Aldi Price Match scheme. 'We have added many customer favourites, including our Tesco own-brand hummus pots and baby plum tomatoes, giving customers the assurance that they are getting great prices on some of our most popular products.' The huge price cut extends to non-food items too, including exclusive brands like baby and toddler essentials, Fred & Flo. Tesco have announced this bold move following a strong first quarter, which saw sales go up by 5.9%. And yet, the price drop also coincides with the announcement that the rate of food price inflation rose to 4.4% in May, an increase from 3.4% in April, according to the Office for National Statistics (ONS). As a result, the rising cost of essentials like food puts those on lower incomes under particular pressure to make ends meet. Examples of products added to Aldi Price Match While the programme includes 80 products, here are some of the price drops customers can expect. Tesco Houmous (200g) 99p Tesco Iceberg Lettuce (200g) 64p Tesco Baby Plum Tomatoes (300g) 78p Tesco 2 Steak Slices (300g) £1.75 Tesco Red Onions (3 pack) 95p Tesco Lightly Salted Tortilla Chips (200g) 89p Tesco 2 Breaded Chunky Cod Fillets (350g) £3.49 Tesco Deep Pan Cheese Pizza (386g) £1.35 Fred & Flo Easy Fit Pants Size 4 (42 pack) £3.56 Fred & Flo Baby Shampoo (500ml) 82p Tesco Milk Chocolate Ice Creams (3 pack) £1.39 Tesco Strawberry and Vanilla Ice Creams (4 pack) £1.25 6 Tesco's Clubcard membership offers exclusive discounts on over 1000 products Credit: Alamy What's more, Tesco has more than 1,000 prices fixed included in its Low Everyday Prices deals and 9,000 Clubcard Price deals on offer to members each week. This new batch of lower-priced products comes after the retailers removed over 100 items from the programme in February. What is price matching? Since the cost of living crisis has put more and more pressure on consumers, price matching has become common place amongst the 'Big Four' supermarkets. 6 Morrisons also offer an Aldi price match programme to their customers Credit: Morrisons For Tesco, the Aldi Price Match programme was founded five years ago, in addition to its Clubcard membership programme. The aim is to incentivise customers to shop with the retailer for savings, as the UK supermarket giants battle out to have the best prices.
The Independent
23 minutes ago
- The Independent
Bank of England ‘unlikely' to cut interest rates as inflation pressure grows
The Bank of England is predicted to keep UK interest rates at 4.25% on Thursday amid rising food inflation and the threat of surging oil prices pushing up the cost of living. Most economists think the Bank of England's Monetary Policy Committee (MPC) will opt to keep rates on hold when it meets on Thursday. The MPC has voted to cut rates at every other meeting since it started easing borrowing costs last August, from a peak of 5.25%. This has been possible while the rate of UK inflation has been steadily falling from the highs reached in 2023, at the peak of the cost-of-living crisis. Interest rates are used as a tool to put a lid on unruly inflation, in line with the Bank's task of keeping the rate of Consumer Prices Index (CPI) at 2%. However, rising food prices have been putting pressure on overall inflation recently, with the latest data from the Office for National Statistics (ONS) showing food and non-alcoholic drink prices rose by 4.4% in the year to May. This was the highest level in more than a year, with items like ice cream, coffee, cheese and meat spiking last month. Chocolate prices soared by nearly 18% annually, a record jump for the confectionery. The overall CPI rate came in at 3.4% in May, slightly higher than the 3.3% rate most economists had been expecting. Monica George Michail, associate economist for the National Institute of Economic and Social Research (Niesr) said the institute was forecasting inflation to remain above 3% for the rest of the year amid 'persistent wage growth and the inflationary effects from higher Government spending'. 'Additionally, the current tensions in the Middle East are causing greater economic uncertainty,' she said. 'We therefore expect the Bank of England to keep rates on hold this Thursday and implement just one further cut this year'. Sandra Horsfield, an economist for Investec, said the Bank of England is likely to be encouraged by services inflation dropping to 4.7% in May, from 5.4% in April. This could indicate that higher employer national insurance contributions, which rose in April, have not been passed onto consumers to the extent that policymakers had feared, she said. But Ms Horsfield said 'other uncertainties remain, not least with respect to US tariffs and the indirect impact this will have on UK firms'. 'The risk to energy prices has clearly intensified and moved up the agenda given developments in the Middle East,' she said. 'It seems unlikely the MPC will want to change policy rates this week. 'But we think Wednesday's data keep another rate cut at the subsequent MPC meeting in August firmly on the table.'
