Mortgage

Home price inflation slows for the first time since December 2023: ONS – Mortgage Strategy

House prices in the UK rose by an average of 3.5% to £265,000 in the 12 months to April 2025. This year’s growth rate dropped from 7% in 12 months to March 2025.

As the latest NSA data reveals, this is the first slowdown in annual home inflation in the UK since December 2023.

According to ONS, this is due to a price drop between March 2025 and April 2025, which coincides with the Stamp Duty Land Tax (SDLT) change.

ONS insists that the SDLT changes in April 2025 result in the average house price being temporarily higher in March 2025, as buyers have the motivation to complete the purchase before the changes take effect.

A similar pattern was observed in the fall of 2021 before the October 2021 SDLT changes.

On a regional basis, the average house price in England rose to £286,000 (3.0%), and the average house price in Scotland rose to £210,000 (5.3%) in Wales, and the average house price in Scotland rose to £210,000 (5.3%) in the 12 months to April 2025.

Commenting on the latest figures, Chris Little, Chief Income Officer of Finova, said: “Despite the change in stamp duty in April, the elasticity of housing prices reflects the potential strength of the UK housing market. Although we may expect a slowdown in decline after the after-tax interruption and consistent demand, demand remains stable, with accumulated savings and continued appetite.

“Looking forward, it will largely depend on the rate of lower interest rates, future income growth and inflation trends, and tomorrow’s Bank of England’s decision may remain stable, but keep a close eye on signs of relaxation.”

Jackson-Stops chairman Nick Leeming said the recent price increase reflects ongoing buyer confidence, partly due to the natural outcome of the activity ahead of the March stamp duty deadline. “But stubborn inflation may prevent the rapid decline in mortgage rates. Buyers are hesitant in amid increasing economic pressures from households and wider economic uncertainty. Beyond that, asking prices need to reflect current reality where supply starts to outperform demand, which will increase demand later this year as lower interest rates lower the UK’s Riverside combined.”

“May is a month after the rebuild in terms of applicants’ digital and supplier activities. We are inspired by the re-engagement of sellers and buyers. It’s the basis for stability, heading to the summer.”

Amy Reynolds, head of sales at Antony Roberts, Richmond real estate firm, said that given that the market is traditionally moving, the market is the busiest period, the market is expected to rise.

“Unfortunately, another reduction rate this week is unlikely given inflation figures, which is disappointing, as a half-point cut will stimulate growth.

“However, there is still a lot of money and a desire to buy a core price range. Surprisingly, we’re seeing growth in first-time buyer activity even if the stamp duty holiday is over. Many are getting help from their families and are likely to be under pressure from the rental market, demand is far outstripping supply, while rental listings are down sharply as real estate areas drop sharply.

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