House prices fell as the stamp duty changes began

According to new figures nationwide, home prices fell in April as buyers face more stamp duty.

The Building Association said the price fell by 0.6%.

The market is expected to slow down due to changes in stamp duty thresholds launched on April 1.

The growth of home prices has also slowed down, but the expensive home is 3.4% expensive, with an average price of £270,752 now.

National chief economist Robert Gardner said there was a “significant jump” in March, with buyers bringing purchases to avoid additional tax charges.

“The market may remain soft over the next few months,” he said.

But Mr Gardner added that purchases may develop in the summer as the summer comes as the rise in income and expectations for further lower interest rates.

In the October budget, Prime Minister Rachel Reeves announced that the government had decided to lower the stamp duty threshold in England and Northern Ireland.

The changes will take effect in April, meaning home buyers are now paying taxes on properties over £125,000 instead of over £250,000 as they used to be.

First-time home buyers are now also required to pay stamp duty for homes costing more than £300,000, and until April changes, they don’t have to pay unless the property exceeds £425,000.

Nationwide’s home price data is based on its own mortgage, which does not include buyers who purchase cash or buy a deal. Cash buyers account for about one-third of home sales.

According to British economist Ashley Webb, house prices in April were the biggest monthly drop since August 2023.

He said a lower mortgage interest rate would help raise housing demand in the coming months, offsetting any tightening of spending at higher prices that could be caused by U.S. President Donald Trump’s trade tariffs.

Mr Webber added that house prices are expected to rise 3.5% this year and 4.5% in 2026.

While many of the lowest deals still require borrowers to provide substantial deposits, a mini price war between mortgage providers has broken out.

Now all major UK lenders offer fixed mortgage transactions with interest rates below 4%, but brokers say no guarantees of further cuts.

Recent data suggest that less exclusion mortgages (5% or 10%) are available than at any time since the 2008 financial crisis.

While home prices and mortgage rates are higher than most of the past 17 years, the additional options are the driving force behind first-time home buyers.

There is expectation that the Bank of England could lower interest rates three times this year, due to the global impact of U.S. trade tariffs. This, in turn, reduces mortgage costs.

“With the expected further tax cuts and competition among mortgage providers, we hope to accelerate the market through gears for the rest of the year,” said Jean Jameson of Foxtons.