UK house prices experienced their largest monthly decline in over two years in June, according to the latest figures from mortgage provider Nationwide. Prices dropped by 0.8%, representing the steepest fall since February 2023.

Although annual price growth stayed in positive territory at 2.1%, this marks the slowest year-on-year rise in nearly a year. The downturn appears to be linked to a slowdown in buyer activity following changes to stamp duty thresholds introduced in April.

Stamp Duty Changes Prompt Short-Term Cooling

Under the updated rules, homebuyers in England and Northern Ireland now pay stamp duty on purchases above £125,000—down from the previous threshold of £250,000. First-time buyers also face a reduced exemption limit. These changes appear to have affected demand, particularly in the lower and mid-range sectors of the market.

The lead-up to the changes saw a surge in completed transactions, followed by a natural slowdown—an effect analysts widely believe will be temporary.

Housing Market Forecast: Signs of Resilience

Despite the June dip, market experts, including Nationwide, anticipate a recovery in housing activity over the coming months. Several factors continue to underpin the market, including:

  • Low levels of unemployment

  • Wages rising faster than inflation

  • Potential interest rate cuts by the Bank of England later in the year

Additionally, a recent uptick in mortgage approvals suggests the market may begin to stabilise or even recover during the second half of the year.

Business Impact: A Temporary Pause

For businesses, particularly those operating in property, retail, or home improvement sectors, the short-term fall in prices and activity may reflect a brief period of consumer caution.

However, wider economic trends point more towards a market adjustment rather than the beginning of a sustained downturn.

For more details, see the full article on the BBC: https://www.bbc.co.uk/news/articles/c9dggnl4391o