Stamp Duty Hike Drives Biggest Fall in UK House Prices in Four Years

Srichand Myneni

15th August 2025

Written by Srichand Myneni

UK house prices experienced their fastest monthly decline in nearly four years this April, following the end of a temporary stamp duty holiday that had previously boosted demand.

According to Land Registry data published on Wednesday, property prices fell by 2.8% between March and April, the largest monthly drop since July 2021. This brought the average house price down to £265,000, with annual growth slowing to 3.5%, compared to 7% in March. It also marked the first annual slowdown in house price growth since December 2023.

Aimee North, head of housing market indices at the Office for National Statistics (ONS), noted that the cooling in prices followed recent changes to stamp duty land tax in England and Northern Ireland.

As of April 1, stamp duty thresholds reverted to pre-2022 levels. This meant that many buyers, including first-time buyers, started paying the tax on homes worth more than £300,000, down from the previous threshold of £425,000.

Regionally, the south-west saw the lowest annual price growth, at just 0.9%, following a sharp 3.8% monthly decline. The average house price in the region is now £300,600.

The official figures suggest a bigger price drop than that reported by Nationwide, which recorded a 0.6% decline for the same period. Unlike Nationwide, Land Registry data includes both mortgage and cash purchases from all lenders.

Some analysts suggest the slowdown is temporary. Elliott Jordan-Doak, economist at Pantheon Macroeconomics, argued that the fall likely reflects demand being brought forward ahead of the tax change, rather than a lasting impact of higher taxes. “We expect the slowdown to be brief,” he said.

Meanwhile, Nationwide reported that prices rose again in May, driven by strong wage growth and easing mortgage rates.

Rental data from the ONS also showed signs of a cooling market. Although private rents increased by 7% year-on-year to an average of £1,339, this was the fifth consecutive month of slowing rental growth and the lowest rate since April 2023.

Louisa Sedgwick, managing director of mortgages at Paragon Bank, said renters may welcome this moderation, but high demand and low supply will likely keep rents rising faster than inflation.