House prices stagnate as stamp duty changes take effect

In the UK, the housing market faced significant changes as the stamp duty holiday concluded at the end of March 2025, leading to a pause in house price growth. Nationwide Building Society noted a 0.0% month-on-month average change in house prices for March, following a 0.4% increase in February. The annual rate of house price growth stabilized at 3.9%, indicating that while the immediate market response was flat, the yearly comparison reported a consistent trend. The average UK house price calculated during this period was approximately £271,316. The changes in stamp duty, specifically the reduction of 'nil rate' bands, have had a pronounced impact on buyers, particularly first-time buyers who may face heightened costs due to the new tax obligations. This situation has raised concerns about mortgage affordability and overall market activity as the changing tax distribution likely drives future buyer behavior, with a shift towards completing transactions before the implementation of new tax rules. Experts, including Robert Gardner from Nationwide, suggested that the end of the stamp duty holiday created a temporary cooling effect in the housing market. This follows a typical pattern seen when significant fiscal adjustments take place, where buyers rush to complete transactions before adjustments elevate costs. Nevertheless, employment rates and rising real wages could continue to support the market in the long run despite these pressures. Looking to the future, there is optimism about a possible resurgence in buyer activity as the warmer months approach. Though some analysts foresee a reset in demand and potential cooling in price growth, seasonal trends typically bolster housing market activity during the spring and summer. Conditions such as low unemployment and increasing household confidence may contribute to stabilizing prices, countering the short-term volatility from the recent tax alterations.