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UK house prices unexpectedly plunged in June, according to Nationwide, undershooting forecasts and recording their largest monthly fall since January 2023.
The average cost of a property dropped by 0.8 per cent between May and June to £271,619, following a revised 0.4 per cent increase in the previous month, according to the lender’s data published on Tuesday.
The annual growth rate fell to 2.1 per cent, down from 3.5 per cent in the previous month.
Both figures were below expectations as economists polled by Reuters had forecast a 0.2 per cent month on month increase and a 3.1 per cent annual expansion.
Robert Gardner, Nationwide’s chief economist, said: “The softening in price growth may reflect weaker demand following the increase in stamp duty at the start of April.”
However, he expects “activity to pick up” from the summer as “the unemployment rate remains low, earnings are rising at a healthy pace in real terms, household balance sheets are strong and borrowing costs are likely to moderate a little”.
The stamp duty thresholds reverted to pre-2022 levels on April 1, increasing costs for many property buyers and triggering volatility in prices and transactions.
First-time buyers, for example, started paying the levy for properties worth £300,000 or more, instead of the previous threshold of £425,000.
