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UK house prices contracted much more than expected in April as the stamp duty levy increased, according to lender Nationwide.
Prices fell 0.6 per cent month on month in April, below the zero growth forecasted by economists polled by LSEG, taking the average house price to £270,752, new data showed on Wednesday.
Nationwide said house prices were still 3.4 per cent higher than in April last year, however, but lower than analysts’ expectations of 4.1 per cent and down from an annual rise of 3.9 per cent in the previous month.
Robert Gardner, Nationwide’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.”
He added: “The market is likely to remain a little soft in the coming months, following the pattern typically observed following the end of stamp duty holidays.”
Nationwide’s is the first key house price data for April, when stamp duty returned to the rates applied before the temporary holiday for certain purchases between September 2022 and March 2025. From April, first-time buyers, for example, will start paying the levy for properties worth £300,000 or more, instead of £425,000 at present.
However, Sandra Horsfield, economist at Investec bank, said if the tariff-led drop in swap rates that determine lenders’ mortgage offers is sustained, this could “tempt more buyers into the market and lift house prices more visibly over the coming months”.
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