UK house prices recorded their steepest monthly fall in over two years in June, according to the latest data from mortgage lender Nationwide. Prices declined by 0.8%, marking the largest drop since February 2023.
While annual growth remained positive at 2.1%, this was the slowest year-on-year increase in nearly 12 months. The downturn appears to reflect cooling demand following stamp duty threshold changes introduced in April.
🏠Stamp Duty Changes and Market Adjustment
The stamp duty reforms mean that homebuyers in England and Northern Ireland now start paying the tax on properties over £125,000, down from the previous threshold of £250,000. First-time buyers also saw their exemption limit reduced, which has likely dampened enthusiasm — especially in lower to mid-range property brackets.
The reforms prompted a surge in transactions before the deadline, followed by a temporary drop-off in activity — a trend many analysts believe will be short-lived.
Outlook for the Housing Market 🔍
Despite the June dip, forecasters including Nationwide expect activity to rebound in the coming months. Factors supporting the market include:
- Low unemployment
- Earnings continuing to outpace inflation
- Potential interest rate cuts from the Bank of England later this year
Recent increases in mortgage approvals also point toward a possible stabilisation or recovery in the second half of the year.
📉Implications for Businesses
For businesses, the short-term dip in house prices and transaction volumes may signal temporary caution among consumers.
However, broader economic indicators suggest this is more of a pause than a downturn.
For more info, see: https://www.bbc.co.uk/news/articles/c9dggnl4391o