UK house prices unexpectedly stall in March as stamp duty tax break ends

Published 01/04/2025, 07:54
© Reuters.

Investing.com -- U.K. house prices were flat in March, missing expectations of modest growth, as the end of a key stamp duty tax break weighed on the market, according to figures from lender Nationwide.

Data released Tuesday showed the average home price remained steady at £271,316 between February and March. On an annual basis, prices were 3.9% higher than a year earlier, matching February’s year-on-year rate.

Economists surveyed by Reuters had expected a 0.2% monthly increase and a 4.1% annual gain.

Robert Gardner, chief economist at Nationwide, said the figures were “unsurprising, given the end of the stamp duty holiday at the end of March.” He said that transactions tied to mortgage approvals late in the month were unlikely to be finalized before the deadline.

“Indeed, the market is likely to remain a little soft in the coming months since activity will have been brought forward to avoid the additional tax obligations — a pattern typically observed in the wake of the end of stamp duty holidays,” Gardner added.

The temporary tax relief, introduced in September 2022 to support buyers amid rising mortgage rates, expired in March.

From April 1, first-time buyers will start paying stamp duty on homes priced above £300,000, down from the previous £425,000 threshold. Similar adjustments apply to other buyers.

Meanwhile, Bank of England data published Monday showed a slight decline in mortgage approvals in early 2025. Still, February approvals were up 8.2% from a year earlier and in line with pre-pandemic levels seen in 2019, reflecting the market’s rebound from the 2023 downturn.

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