House prices in the UK are dropping, but the market is expected to improve in the summer
House prices fall to £270,752 in April due to stamp duty changes, Nationwide says
UK house prices dropped by 0.6% on average in April compared to March, according to a building society. This happened as the market slowed down a bit after a rush to buy before changes to stamp duty in England and Northern Ireland.
The yearly rate of house price growth fell to 3.4% in April, down from 3.9% in March. This brought the average property value in April to £270,752, Nationwide said.
Robert Gardner, the building society’s chief economist, explained: “The slowdown in house price growth was expected because of the stamp duty changes at the start of the month.
“Early signs show there was a big increase in home sales in March, with buyers making purchases earlier to avoid paying higher taxes.”
Stamp duty cuts in England and Northern Ireland ended at the start of April, following an announcement by Chancellor Rachel Reeves in her October budget. Scotland and Wales have their own taxes for house purchases.
Nationwide expects the housing market to stay slow in the next few months, as it often does after stamp duty holidays end.
However, the building society predicts that demand for buying and selling homes will rise gradually in the summer, even with the uncertainty in the global economy. This is because the situation is still good for people looking to buy homes.
“Unemployment is low, wages are increasing at a good rate (after adjusting for inflation), household finances are strong, and borrowing costs might go down a bit if the Bank of England cuts its base rate in the next few months, as we and other experts expect,” said Gardner.
The UK’s inflation rate dropped to 2.6% in March, putting more pressure on Bank of England officials to lower interest rates next month, even though the global economy is uncertain because of Donald Trump’s trade policies.
Banks like Barclays and HSBC have introduced more mortgages with rates under 4% this week, as part of their wider rate cuts.
Rightmove’s mortgage expert Matt Smith said: “I think lenders are waiting for the Bank of England’s decision on 8 May and will likely lower rates more if there’s a second rate cut this year.”
Even though people expect the Bank to lower interest rates in May, estate agents say that many potential homebuyers, especially first-time buyers, are still struggling to afford a home.
While this may give some relief to households, the main problem of affordability still exists, especially for first-time buyers facing higher borrowing costs and less help from the government.
Jonathan Handford, a director at the estate agent group Fine & Country, said, “In many expensive areas, house prices are still too high for many buyers to afford. Stricter lending rules and the need for large deposits are keeping many people out of the market, even though financial conditions might improve.”
Published: 1st May 2025
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