House prices in the UK experienced a decline in April, as the initial rush to take advantage of the stamp duty threshold relief diminished. This information comes from data published by Nationwide, the largest building society in the country.

The month-to-month price drop was larger than anticipated, falling by 0.6 percent, marking the most significant decrease since August 2023. In terms of annual growth, the increase slowed to 3.4 percent, down from 3.9 percent in March.

The current average price of a home now stands at £270,752.

Robert Gardner, the chief economist at Nationwide, commented, “The slowdown in house price growth aligns with expectations, particularly with the recent changes to stamp duty at the beginning of the month. Initial reports indicate that there was a notable spike in transactions during March as buyers expedited their purchases to avoid new tax burdens.”

Effective from April 1, first-time buyers in England and Northern Ireland are now subject to stamp duty on properties priced over £300,000, reduced from a previous threshold of £425,000. Additionally, the point at which other buyers begin incurring the tax has been lowered from £250,000 to £125,000.

Gardner anticipates that the housing market will likely remain subdued in the upcoming months, reflecting the typical trends observed post-stamp duty incentives.

“Nonetheless, we expect activities in the market to gradually increase as summer unfolds, despite the ongoing uncertainties in the global economy, as the fundamental factors supporting potential UK home buyers remain favorable,” he added.

Recent data from the Bank of England indicated that lenders are expecting mortgage demand to stabilize in the coming months. The markets are anticipating a quarter-point interest rate reduction when the Bank of England’s monetary policy committee convenes next week, which would adjust rates from 4.5 percent down to 4.25 percent.

This month, Barclays became the latest major lender to lower its mortgage rates below 4 percent in response to increasing competition among banks and building societies. Barclays is now providing two-year and five-year fixed rates at 3.99 percent for borrowers with a 40 percent deposit.

Similarly, Coventry Building Society has enacted comparable reductions, offering a two-year fixed rate at 3.89 percent for purchasers with a 35 percent deposit, and a five-year fixed rate at 4.45 percent.