Why stalling house prices may take time to accelerate

There was some blessed relief for people trying to buy their first home last month as the runaway housing market train finally hit the buffers.

- JAMES MOORE

Nationwide’s latest House Price Index recorded a small, seasonally adjusted, 0.6 per cent decline when compared to March. In terms of real money – and do note that this figure is not seasonally adjusted – the average British home sold eased down to £270,752 from £271,316.

That is still higher than this time last year. But the pace of growth on an annual basis, at 3.4 per cent when compared to April 2024, was slower than in the 12 months to March (3.9 per cent).

It has been quite the rollercoaster for those in the game, by which I mean people buying and/or selling and not the sharpsuited estate agents whom they engage.

My editor kindly sent me a picture featuring some headlines from the past few months. They spoke breathlessly of records broken and growth at the fastest pace in two years, which is all very exciting for those sitting on a treasure chest and thinking of cashing in.

So why has it come to a juddering halt? Stamp duty, mainly. There was a rush to get deals done in March ahead of the hike imposed by Rachel Reeves. Cash-strapped chancellors love stamp duty because just about the only way to avoid it is to get in quick before the hammer falls. Given the state of public finances, Reeves may increase it again in September.