The annual rate of house price growth slowed to 3.4% in April, from 3.9% in March, according to the latest house price index from Nationwide.
The data shows that house prices fell by 0.6% month-on-month, after taking account of seasonal effects.
Robert Gardner, Nationwide's chief economist, said: “The softening in house price growth was to be expected, given the changes to stamp duty at the start of the month. Early indications suggest there was a significant jump in transactions in March, with buyers bringing forward their purchases to avoid additional tax obligations.
“The market is likely to remain a little soft in the coming months, following the pattern typically observed following the end of stamp duty holidays. Nevertheless, activity is likely to pick up steadily as summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive.
“Unemployment remains low, earnings are rising at a healthy pace in real terms (i.e. after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect. Indeed, swap rates (which underpin fixed rate mortgage pricing) have moderated in recent weeks.”
Jonathan Handford, managing director at national estate agent group Fine & Country, commented: "House price growth dipped in April, a sign that the market is beginning to feel the effects of tighter affordability and reduced stamp duty incentives.
"This cooling comes as no surprise, given that many buyers brought forward their purchases to beat the March threshold change, leaving a quieter pipeline in the immediate aftermath.
"The dip coincides with a broader easing of economic pressures. CPI inflation fell to 2.6% in March, down from 2.8% in February, edging closer to the Bank of England’s 2% target. While this offers some breathing room for households, underlying affordability issues remain a major hurdle, particularly for first-time buyers navigating higher borrowing costs and reduced government support.
"The Bank of England held the base rate steady at 4.5% in its latest meeting, but there is growing speculation that cuts could come as soon as May. That outlook is being shaped not only by domestic inflation data but also by global headwinds — including the potential disruption caused by changes to global trade. However, this could also prompt UK policymakers to act faster to support growth and ease lending conditions.
"Even so, challenges persist. In many high-cost areas, house prices remain out of reach for a significant share of aspiring buyers. Stricter lending rules and large deposit requirements continue to shut many out of the market, despite signs that broader financial conditions may improve.
"April’s slowdown reflects a natural rebalancing after a period of deadline-driven demand. But with inflation softening and rate cuts increasingly likely, the market could regain momentum later this year, provided affordability barriers are addressed."
Jason Tebb, president of OnTheMarket, added: “Although a number of buyers brought forward transactions to take advantage of the stamp duty concession, there is still plenty of activity in the market now this incentive is no longer available.
"Other inducements – such as interest rate reductions – are even more essential. Two quarter-point base-rate cuts in the second half of last year, followed by one so far this year, have noticeably boosted sentiment and transactions. All eyes are on the Bank of England to see whether it will follow up with another cut next week – if it does, this will give added impetus in May and June, which have the potential to be busy months for the market.
"Affordability remains an ongoing concern with rates still higher than many borrowers have grown used to, combined with the high cost of living and other pressures. Lenders have been trimming mortgage rates in recent days and further action from the Bank of England should enable this trend to continue, giving buyers who rely on mortgages increased confidence to make their move.
"With more property stock on the market as one would expect at this time of year, average house prices are being held in check, although of course local markets and even individual properties can vary considerably. Buyers on the whole remain sensitive on price and keen to negotiate because of affordability pressures, so sellers should seek advice from local agents who really understand their market and price accordingly."
