UK house prices saw their sharpest monthly fall in nearly four years this April, dropping 2.7%, according to official figures. But rather than signaling a market downturn, the fall was mainly caused by buyers rushing to complete purchases before stamp duty thresholds were lowered on 1 April 2025.
The cuts—reducing the nil-rate band from £425,000 to £300,000 for first-time buyers and from £250,000 to £125,000 for others—triggered a flurry of early completions in March, followed by a steep drop in April transactions (down 64%). This artificial dip has skewed the monthly price data, masking the underlying resilience in the market.
Despite the April blip, annual price growth remains positive at around 3.5%, although that’s down from 7% in March. Average house prices now sit at £265,000. More recent data from lenders suggests the market is stabilising, with Nationwide reporting a 0.5% monthly rise in May, and Halifax also noting a small gain.
It is additionally worth noting that for those buyers with 75% LTV mortgages a rise of 3.5% per annum would translate to a profit on capital of 14% in just one year before rental profit is added to the mix.
Regionally, Northern Ireland continues to lead the market with annual growth of around 9.5%. Scotland, Wales, and northern England are showing mid-single-digit increases, while the South West and London remain weaker—though notably, London prices actually rose in April.
Looking ahead, the market’s direction will largely depend on interest rates. If the Bank of England begins cutting rates, mortgage affordability will improve and could fuel further price growth. Strong wage growth, low unemployment, and stable lending conditions are also helping to support prices.
For property investors, April’s price dip looks like a short-term reaction to tax changes rather than a long-term correction. With the market already showing signs of recovery, and regional hotspots continuing to outperform, this could be a smart entry point before prices edge higher again.
