UK (Parliament Politics Magazine) – UK house prices dropped by 0.8% in June, the sharpest fall since 2023, with experts citing lower demand after the end of stamp duty relief, says Nationwide.
As reported by The Guardian, the UK housing market recorded its biggest fall in more than two years amid weaker demand post-tax relief, but market activity may recover this summer.
What did Nationwide reveal about the UK’s steep house price fall?
Data from Nationwide says the average UK house price declined by 0.8% in June, falling to £271,619. This marks the biggest single-month decline since February 2023. The house price inflation dipped to 2.1% in June, down from 3.5% in May.
Northern Ireland remained the strongest-performing region for annual house price growth at 9.7% in Q2, despite slowing from 13.5%. Growth in England slowed to 2.5%, with Scotland and Wales posting gains of 4.5% and 2.6%, respectively.
Among UK regions, East Anglia saw the weakest growth, with house prices up only 1.1%.
According to Rightmove, UK house prices fell by 0.3% in June amid the toughest selling conditions in ten years.
Stamp duty relief in England and Northern Ireland ended in April, pushing up the cost of home purchases by several thousand pounds.
What did Robert Gardner say about the house price slowdown?
Robert Gardner, the Nationwide chief economist, stated,
“The softening in price growth may reflect weaker demand following the increase in stamp duty at the start of April.”
He said,
“Nevertheless, we still expect activity to pick up as the summer progresses, despite ongoing economic uncertainties in the global economy, since underlying conditions for potential homebuyers in the UK remain supportive.”
Mr Gardner pointed out that unemployment remains low and real earnings are rising steadily, even after adjusting for inflation. He believes household balance sheets are resilient, and borrowing could become cheaper if interest rates fall further as expected.
What did falling rates and rising terrace prices reveal about the UK housing market?
Markets have priced in a likely rate cut in August, assigning it a 76% probability. Analysts also anticipate another drop before year’s end, most likely in November.
House price growth in the UK showed a smaller divide between North and South during Q2.
- Northern England (North, North West, Yorkshire and the Humber, East Midlands, West Midlands) – Prices rose by 3.1% year-on-year
- Southern England (South West, Outer South East, Outer Metropolitan, London, East Anglia) – Prices increased by 2.2%
Over the past 12 months, terraced house prices rose the most among all property types, climbing by 3.6%. Flat prices saw a sharp slowdown, growing only 0.3%, while semi-detached and detached homes increased by 3% and 3.2% respectively.
Labour’s housing target
- 1.5M homes target: Labour plans 1.5 million homes by 2030.
- Affordable housing boost: Big push for social and low-cost homes.
- Brownfield focus: Build on unused and low-quality greenbelt land.
- Faster planning: Set housing targets and speed up approvals.
- Help for buyers: Support 5% deposits and local home access.