House prices fall at sharpest pace in four years in wake of stamp duty raid
House prices in the UK fell at their sharpest pace in nearly four years after a temporary cut to stamp duty for cheaper properties came to an end.
Between April and March, the average UK property dipped 2.8pc in value to about £265,000, according to the Office for National Statistics (ONS).
On April 1, the stamp duty discount ended, meaning the threshold at which buyers start paying the levy was reduced to £125,000 from £250,000.
For first-time buyers in England, the threshold for not paying stamp duty was also reduced from £425,000 to £300,000.
It is the steepest decline in monthly house prices since July 2021 when house prices also fell after another stamp duty holiday finished in June that year.
Elliott Jordan-Doak, a senior UK economist at Pantheon Macroeconomics, said: 'April was the first month that completed mortgages were subject to the higher stamp-duty costs, but we think the fall in house prices was driven by an unwind of activity brought forward, rather than higher taxes hitting demand.'
He added that the slowdown in prices is 'expected to be brief' as the housing market normalises in the coming months.
London was the only region in England to report an increase in house prices between April and March, with prices rising by 2.3pc in the capital. By contrast, the North East recorded the largest monthly slump as house prices fell 7.4pc.
Annual house price growth slowed to 3.5pc in April, down from 7pc in March as home buyers rushed to complete their purchases before the tax holiday came to an end.
The stamp duty reduction was introduced by Liz Truss in her mini-Budget in September 2022, but was scrapped just weeks later by Jeremy Hunt in his autumn Budget.
The latest house price data comes as stubborn inflation continues to cause headaches for the Bank of England.
The Bank's Monetary Policy Committee (MPC) is expected to hold rates at 4.25pc on Thursday, dashing hopes for prospective buyers hoping for a reduction in borrowing costs.
'New highs'
Last month, the MPC voted to cut the bank rate by 0.25 percentage points from 4.5pc to 4.25pc. However, traders have priced in just one more cut in 2025.
Ashley Webb, UK Economist at Capital Economics said he expects 'housing transactions to recover to their pre-pandemic levels and house prices to reach new highs even though mortgage rates will remain higher over the next few years than before the pandemic'.
Mr Webb said the strong demand from homebuyers is expected to be supported by borrowers increasing the length of their mortgage term, supporting a continued rise in prices.
'Overall the increase in mortgage terms and looser lending standards has led to a shift in the relationship between housing transactions/prices and mortgage rates that probably has a bit further to run,' he said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
30 minutes ago
- The Sun
Britain's £100billion benefits timebomb that no one is brave enough to defuse
TO the hand-wringing Labour MPs plotting to torpedo the government's £5billion in welfare cuts, some facts. Even with that squeeze, we are still hurtling towards a £100billion sickness benefits bill EVERY YEAR by the end of the decade. 4 4 That is roughly equivalent to the entire size of Slovakia's economy — or the annual output of the City of London. It is more than the combined yearly budgets of the police, prisons and courts — and twice that of what we spend on defence. You could buy every Premier League club several times over and then some. And that is before you even scratch the surface on public money for jobseekers and the elderly. Britain is a nation that looks after people — at ease with the language of safety nets, support and compassion. But we have to be honest about what we have become: a nation hooked on handouts that is driving our economy on to the rocks. Painfully clear A creaking welfare state — with a price tag no government can control and no taxpayer can sustain — is ready to burst. The parliamentary bill to reform it — introduced yesterday by Work and Pensions Secretary Liz Kendall — was meant to be the moment Labour got serious. It tightens eligibility for Personal Independence Payments (PIP), slashes Universal Credit for new claimants and freezes it for existing ones. On paper it is a package designed to 'make the system sustainable' and save the Treasury £5billion a year by 2030. Five key changes to PIP & Universal Credit as Labour's benefits crackdown unveiled But when you actually read the figures, it becomes painfully clear just how little difference it will make. Britain is still projected to spend £100.7billion a year on health and disability benefits by 2029–30 — up from £64.7billion just last year. That is a 55 per cent rise in just six years, driven largely by soaring costs in working-age sickness and disability payments, with PIP fuelling the surge. Once meant to help those with serious long-term physical and mental conditions live independently, PIP is now claimed by more than 3.7million people — and demand is only accelerating. The number of new applications has shot up by 70 per cent since 2018, with more than 1,000 new claims A DAY thudding on to DWP desks. The bill for PIP alone has already ballooned from £12billion in 2019 to more than £21billion today, and it is predicted to hit an eye-watering £42.3billion by 2028–29. Driving this explosion is a marked rise in claims linked to mental disorders — now the main condition for nearly 70 per cent of new applicants under-35. Combined with long Covid, chronic fatigue, and musculoskeletal complaints such as back pain, we have arrived at a staggering projection: that by 2030 nearly one in 12 working-age Brits will be economically inactive due to long-term sickness. International comparisons lay bare just how much of an outlier the UK has become. We now spend more on working-age disability benefits as a share of GDP than almost any other advanced economy. Most European countries — including France, Germany and the Netherlands — have seen their incapacity benefit caseloads remain steady while ours is still climbing. Is it any wonder why critics start to mutter about the UK becoming the ' Sicknote Man of Europe '. But far from marking a moment of unity for Labour, the new bill has lit the fuse on a major rebellion and split the party in two. More than 100 Labour MPs are squeamish about the proposals, and many have already threatened to vote it down when it comes to a vote in the next few weeks. Supporters of the reforms say the real betrayal would be pearl-clutching backbenchers pretending the current system can continue. One Labour insider told me: 'You can't call yourself progressive if you ignore a system that's spiralling out of control. This isn't about cruelty. It's about honesty.' The internal row gripping the party was not unexpected — but the scale of it was. A far tougher package was meant to be unveiled at March's Spring Statement to lance the boil in one fell swoop. But after internal leaks and pushback from Labour left-wingers, No10 blinked. 4 The result? A lightweight version, rushed out early and designed to placate mutinous MPs. One senior Government figure admitted to me a few months ago: 'We had one shot to fix this, and we bottled it. These are half-measures. They won't be enough.' The deeper danger now is not just the cost but the fact political will to act is slipping away. We are an old population, with flatlining productivity, who have very few babies. We cannot have a generous welfare state and a national social care service, and a massive in-work support system Backbencher Some inside the party get it. They know the writing is on the wall: an ageing population, low birth rates, flatlining productivity and soaring demand on every part of the state. Commons humiliation As one influential backbencher put it: 'We have to get serious about reforming the state. "We are an old population, with flatlining productivity, who have very few babies. We cannot have a generous welfare state and a national social care service, and a massive in-work support system. 'We need to change expectations about what Government does in a radical and sustained way. I do not see us being serious about that right now.' Behind the scenes, the whips are in damage control mode, trying to keep a lid on the rebellion. Abstentions might help Labour avoid a Commons humiliation but they will not solve the underlying dilemma. This is not just about one benefit, or one Budget line. It is about what kind of state Britain can be in the 2020s and beyond — and how much we can afford. For too long politicians have ducked the debate, layering new promises on top of old ones without ever confronting the trade-offs. Now, the bill is landing and it's not just a financial one, it's political, too. Labour may win the vote but its bigger test is yet to come: can it finally level with the public, not just about what needs cutting, but what kind of country we want to be? 4
BBC News
39 minutes ago
- BBC News
Birmingham councillors clash over 'arrogant' vision for city
Birmingham City Council's ruling Labour group has come under fire from opposition councillors over a vision for the city's authority's new corporate plan sets out its priorities for the next three years and how it intends to address governance and financial challenges, after it declared effective bankruptcy, in say they want to make the city fairer, greener and healthier, by exploring issues such as housing need, unemployment and child a meeting where the plan was unveiled, leader John Cotton said the vision showed a "determination to right previous wrongs", but the Conservative group said it was "arrogant" and a possible "Labour election pitch". Tory councillor Deirdre Alden proposed an amendment stating that any long-term strategy should be based on the mandate delivered by voters following all-out elections next said the administration should focus until then on balancing the books, resolving equal pay and ending the bin strike, among other priorities."Time and resources should not have been spent now on developing a strategy for the years after 2026," she said."It's arrogant and it starts to look as if council resources have been spent on a Labour election pitch." Cotton described the plan as a "milestone", adding it was a "clear demonstration of our ambitions for Birmingham".Liberal Democrat group leader Roger Harmer suggested the Labour administration was instead a "millstone around the necks of our city".Green Party councillor Julien Pritchard argued the council's plans did not "seem to survive contact with reality". 'No apology for ambition' In response to the Conservative amendment, Cotton said it removed "forward-looking ambition"."I certainly, as leader of this council, make no apology for being ambitious for Birmingham," he told the chamber."I've never stood in this chamber and speculated about what happens in future elections, I think that's a fool's game," he said."But I do know Brummies will not accept a politics and a vision that's built on negativity." The effective bankruptcy declaration triggered a wave of cuts to services and plans to raise council tax by about 20% over two that contributed to the council's financial crisis, according to external auditors, include an equal pay row, disastrous implementation of a new IT system and inadequate housing a bin strike that started with one-day walkouts in January, is now in its sixth corporate plan was approved but the Conservatives' amendment was not passed. This news was gathered by the Local Democracy Reporting Service, which covers councils and other public service organisations. Follow BBC Birmingham on BBC Sounds, Facebook, X and Instagram.
Times
40 minutes ago
- Times
What happened to HS2? The project that made Britain a laughing stock
I t was supposed to be the flagship rail project to the north-south divide, a catalyst for growth, new employment opportunities and unrivalled connectivity. London, Birmingham, Leeds, Manchester and Sheffield would be linked by trains travelling at up to 248mph. There would be connections to Heathrow and potentially to the Channel Tunnel. The cost was to be a mere £32.7 billion. Almost two decades after it was first proposed, however, HS2 is in tatters. The absence of a guiding mind, a single accountable person in Westminster or Whitehall, has led to runaway costs, delays and routes being axed. What remains is little more than a skeleton of the original design.
