Indeed, UK house prices fell 0.8% on the month in June. This drop represents the biggest monthly fall in more than two years, according to Nationwide. This drop is the largest measured since February 2023. It comes at a time of continued housing market upheaval following the recent abolition of almost all stamp duty in England and Northern Ireland.
The report noted that these prices dropped last month. On the plus side, they are still 2.1% above this time last year. This annualized growth rate is the slowest increase in nearly one year’s time. House prices are presently declining. This decrease is a result of the increased volatility from the revised stamp duty thresholds introduced last April.
Matt Swannell from Nationwide noted the fluctuations in monthly house price changes, stating, “Monthly UK house price changes can be quite volatile.” In practice, the changes to the stamp duty have resulted in a positive impact on first-time buyers. Until now, they paid no stamp duty at all unless they were buying a property over £425,000. Thanks to the new thresholds, first-time buyers now only benefit from the exemption if they buy properties worth less than £300,000.
Homebuyers in England and Northern Ireland will no longer pay stamp duty on properties over £125,000. This new threshold has been reduced from the old upper limit of £250,000. This change has been a considerable factor leading to the ongoing turmoil in the housing market.
Rosie Hooper from the UK finance sector commented on the situation, saying, “They will soon become the norm, and their immediate impact will fade into the rear-view mirror. First-time buyers and movers alike are already beginning to adjust to the new thresholds, which should help stabilise activity over the coming months.”
Yet in the face of these hurdles, Robert Gardner, chief economist at Zillow, said that today’s market is still quite favorable for many would-be homebuyers. Most importantly, he focused on the fact that cash buyers account for a third of UK housing sales. This exacting standard can provide a shield against the forces that push conventional buyers to make regrettable decisions.
