House prices in the UK edged down in April as changes to stamp duty thresholds took effect, new data from Nationwide shows.

The building society reported a 0.6% fall in prices compared with the previous month, marking the sharpest monthly drop since August last year. Despite the decline, property values remain 3.4% higher than they were at this time in 2024, with the average UK home now costing £270,752.

The dip follows a surge in transactions in March, as buyers moved quickly to complete purchases before new tax rules came into force on 1 April.

“There was a significant jump in transactions in March, with buyers bringing forward purchases to avoid the additional tax charges,” said Robert Gardner, chief economist at Nationwide. He added that while activity may remain subdued in the short term, improving wages and expected interest rate cuts could spur renewed demand during the summer.

The recent tax changes, announced by Chancellor Rachel Reeves in October, reduced the threshold at which stamp duty is paid in England and Northern Ireland. Buyers must now pay the levy on homes priced above £125,000, down from the previous threshold of £250,000.

First-time buyers are also affected, with the duty now applying to homes over £300,000—previously the charge only kicked in above £425,000.

Nationwide’s figures are based on mortgage data from its own customers, and do not include purchases made entirely with cash or buy-to-let investments. Industry estimates suggest that cash buyers make up roughly a third of all transactions.

Ashley Webb, UK economist at Capital Economics, said the April fall was the largest monthly drop since last summer. However, he noted that recent cuts to mortgage rates could help keep the market buoyant.

He warned that other economic pressures—such as the possible inflationary impact of US trade tariffs under President Donald Trump—could curb spending power. Even so, Webb expects house prices to rise by 3.5% this year and by 4.5% in 2026.

Meanwhile, lenders are engaged in a modest price war on mortgage rates. All major banks now offer fixed-rate deals under 4%, though the most attractive rates are reserved for those with sizeable deposits.

There has also been a rise in the number of mortgages available with lower deposit requirements. Recent data suggests more 5% and 10% deposit deals are on the market now than at any point since the 2008 financial crisis—offering a glimmer of hope to first-time buyers facing high property values and borrowing costs.

Market analysts say the prospect of further interest rate cuts by the Bank of England—potentially up to three more this year—could drive borrowing costs even lower.

“With the anticipation of further rate cuts and mortgage provider competition, we expect to see the market accelerate through the gears over the remainder of the year,” said Jean Jameson, chief sales officer at estate agent Foxtons.

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