UK House Prices Rebound After Stamp Duty Tax Break Ends

Strategic Insights -

Average house prices in the UK saw a month-on-month increase of 0.6 per cent in July, according to Nationwide, Britain's biggest building society, after a 0.9 per cent dip in June. The average cost of a home in July stood at £272,664. This marks a stabilisation in demand following the end of tax breaks on stamp duty in April. The annual rate of house price growth rose to 2.4 per cent in July from 2.1 per cent in June. Buying a property is now the most affordable it has been in over a decade, despite being nearly six times the average UK wage.

Key Takeaways:

  • Average house prices in the UK increased by 0.6 per cent month-on-month in July, following a 0.9 per cent dip in June, according to Nationwide.
  • The annual rate of house price growth rose to 2.4 per cent in July from 2.1 per cent in June, with the average cost of a home at £272,664.
  • Demand has stabilised after the end of tax breaks on stamp duty in April, making buying a property the most affordable it has been in over a decade.
  • Property price rises are slower than consumer price inflation or wages, and the cost of an average house has fallen to around 5.75 times average income from a record high of 6.9 in 2022.
  • Robert Gardner, Nationwide's chief economist, said that the income to house price ratio is currently the lowest it has been for over a decade, helping to ease deposit constraints for potential buyers.
  • Nathan Emerson, chief executive of Propertymark, said that a reduction in interest rates would be welcome, as many people are delaying paying off their mortgages until later in life.
  • The number of mortgages for house purchase approved in June was consistent with the pre-pandemic average, despite higher interest rates.

Statistics:

  • Average house prices in the UK: £272,664 (July)
  • Month-on-month change in house prices: +0.6 per cent (July), -0.9 per cent (June)
  • Annual rate of house price growth: 2.4 per cent (July), 2.1 per cent (June)
  • Number of mortgages for house purchase approved in June: 64,200
  • Tax break on stamp duty ended in: April

Sources:

  • Nationwide
  • HM Revenue and Customs (HMRC)
  • Bank of England
  • Propertymark