Nationwide has reported a slight easing in UK house price growth in April, with annual growth slowing to 3.4%, down from 3.9% in March. Seasonally adjusted prices fell by 0.6% month-on-month, with the average UK house price now standing at £270,752.
Robert Gardner, chief economist at Nationwide, said: “April saw a slowing in UK house price growth to 3.4%, from 3.9% in March. House prices fell by 0.6% month on month, after taking account of seasonal effects.
“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.
“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. Nevertheless, 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.
“Unemployment remains low, earnings are rising at a healthy pace in real terms, household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect. Indeed, swap rates have moderated in recent weeks.”
Nathan Emerson, chief executive of Propertymark, said: “Despite economic uncertainty globally, it is encouraging to see house prices remain resilient month on month. This provides many aspiring home movers with a perfect opportunity to investigate the marketplace more robustly and potentially better negotiate their next steps on the property ladder.
“The housing market remains one of the many backbones of the UK economy, but with average house prices across the UK typically sitting at around seven times the average annual gross salary, the UK Government and devolved administrations need to make fulfilling their housing targets a priority to help even out long-standing demand versus supply issues.”
Mark Harris, chief executive of SPF Private Clients, added: “Another rate cut from the Bank of England next week would give a timely boost to the housing market and wider economy as the weather heats up and properties look their best.
“Lenders have been doing their bit by reducing rates and introducing enhanced affordability measures in recent days. Sub-4 per cent mortgage rates are increasingly available and with cheaper fixed-rate mortgages and reversion rates for borrowers coming to the end of their current deals, it points to a lower rate environment going forward.
“Many lenders are enhancing loan-to-incomes, with April’s seven times income the latest and most eye-catching of these. With NatWest, Leeds, Nationwide and Halifax all targeting first-time buyers in particular, this is encouraging for the general overall health of the housing market as more of these will help facilitate transactions further up the ladder.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, said: “The end of the stamp duty concession in March removed some of the urgency from the market. Some buyers accelerated purchases to beat the deadline but others simply dropped back into ‘wait and see’ mode, hoping that, with inflation now largely under control, the Bank of England might cut interest rates next month.
“The possibility of lower mortgage rates is keeping many buyers cautious, especially first-time buyers and mortgaged movers.
“We are finding that the London property market is caught between a rock and a hard place – sellers’ price expectations, particularly in prime and popular areas, are still unrealistic compared to the offers buyers are willing to make. While there are committed buyers out there, they are highly price-sensitive, and many are no longer prepared to overpay just because stock levels are historically low.
“Best-in-class properties are still attracting strong competition and, in some cases, achieving excellent prices. Buyers continue to pay a premium for properties that are priced sensibly, presented well, and located in prime areas. The message is clear: those who price according to today’s market, rather than yesterday’s headlines, are finding success.”
Further reaction
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“Not surprisingly, house prices have softened a little now the rush to take advantage of the stamp duty holiday has passed.
“However, most sellers have kept their properties on the market and with approximately four out of five also said to be buyers, activity has been maintained at a higher level than we perhaps dared to hope.
“Looking forward, we anticipate much the same although economic uncertainty will continue to reduce confidence the longer that any much-anticipated cut in interest rates is delayed.”
Tomer Aboody, director of specialist lender MT Finance:
“With buyers rushing to complete their transactions before the end of March due to the stamp duty changes, we are seeing the slowdown in April.
“With many of the budget decisions also coming into effect from this month, a subdued few months could be upon us as consumers and businesses grapple with the changes.
“Will the Government see this as an opportunity to potentially own up to some erroneous decisions, and possibly reform stamp duty? Only time will tell.”
Holly Tomlinson, financial planner at Quilter:
“House prices edged down by 0.6% in April, according to the latest Nationwide House Price Index, bringing annual growth to 3.4%.
“The figures point to a market that remains finely balanced.
“Ongoing affordability pressures and recent tax changes are clearly influencing buyer behaviour negatively.
“Mortgage rates, though slightly below their 2023 peaks, remain elevated, with the average 2-year fixed rate hovering around 5%.
“Higher borrowing costs continue to keep monthly repayments high and limit the purchasing power of many would-be buyers.
“At the same time, a shortage of properties for sale should see off any significant drops.
“Many homeowners, reluctant to give up cheaper historic mortgage deals, are choosing to stay put, reducing market turnover and keeping supply tight.
“Adding to the financial pressure on buyers are the recent changes to Stamp Duty Land Tax, which took effect at the start of April.
“The nil-rate band for all buyers has been reduced from £250,000 to £125,000, while for first-time buyers, the threshold has fallen from £425,000 to £300,000.
“The maximum property value eligible for first-time buyer relief has also dropped from £625,000 to £500,000.
“These changes have increased upfront costs, particularly for those purchasing in higher-value areas.
“For example, a first-time buyer purchasing a £500,000 property now faces a stamp duty bill of £10,000, compared with £3,750 under the previous regime.
“This shift in taxation has added a further affordability hurdle at a time when many buyers are already stretched.
“There was a notable surge in transaction activity earlier in the year as buyers rushed to beat the stamp duty changes, but with that deadline now passed, market momentum has cooled once again leading to today’s drop in prices.
“Overall, today’s figures suggest a market that is fragile.
“Any meaningful pick-up in activity is likely to depend on a more material fall in mortgage rates or an improvement in real incomes.
“Until then, the housing market looks set to continue treading water.”
Jason Tebb, president of OnTheMarket:
“Although a number of buyers brought forward transactions to take advantage of the stamp duty concession, there is still plenty of activity in the market now this incentive is no longer available.
“Other inducements – such as interest rate reductions – are even more essential. Two quarter-point base-rate cuts in the second half of last year, followed by one so far this year, have noticeably boosted sentiment and transactions. All eyes are on the Bank of England to see whether it will follow up with another cut next week – if it does, this will give added impetus in May and June, which have the potential to be busy months for the market.
“Affordability remains an ongoing concern with rates still higher than many borrowers have grown used to, combined with the high cost of living and other pressures. Lenders have been trimming mortgage rates in recent days and further action from the Bank of England should enable this trend to continue, giving buyers who rely on mortgages increased confidence to make their move.
“With more property stock on the market as one would expect at this time of year, average house prices are being held in check, although of course local markets and even individual properties can vary considerably. Buyers on the whole remain sensitive on price and keen to negotiate because of affordability pressures, so sellers should seek advice from local agents who really understand their market and price accordingly.”
Jonathan Handford, managing director at national estate agent group Fine & Country.
“House price growth dipped in April, a sign that the market is beginning to feel the effects of tighter affordability and reduced stamp duty incentives.
“This cooling comes as no surprise, given that many buyers brought forward their purchases to beat the March threshold change, leaving a quieter pipeline in the immediate aftermath.
“The dip coincides with a broader easing of economic pressures. CPI inflation fell to 2.6% in March, down from 2.8% in February, edging closer to the Bank of England’s 2% target. While this offers some breathing room for households, underlying affordability issues remain a major hurdle, particularly for first-time buyers navigating higher borrowing costs and reduced government support.
“The Bank of England held the base rate steady at 4.5% in its latest meeting, but there is growing speculation that cuts could come as soon as May. That outlook is being shaped not only by domestic inflation data but also by global headwinds — including the potential disruption caused by changes to global trade. However, this could also prompt UK policymakers to act faster to support growth and ease lending conditions.
“Even so, challenges persist. In many high-cost areas, house prices remain out of reach for a significant share of aspiring buyers. Stricter lending rules and large deposit requirements continue to shut many out of the market, despite signs that broader financial conditions may improve.
“April’s slowdown reflects a natural rebalancing after a period of deadline-driven demand. But with inflation softening and rate cuts increasingly likely, the market could regain momentum later this year, provided affordability barriers are addressed.”
