The average UK house price fell by 0.8% month on month in June to £271,619, marking the sharpest monthly decline since February 2023, according to Nationwide. The drop followed a 0.4% rise in May and reflects weaker demand after the increase in stamp duty at the start of April.
The annual rate of house price growth slowed to 2.1% from 3.5% in May. Northern Ireland remained the strongest performer, with prices up 9.7% year on year in the second quarter, down from 13.5% in the first. Scotland rose 4.5%, Wales 2.6% and England 2.5%, while East Anglia saw the weakest growth at 1.1%.
Separate figures from Rightmove also showed a 0.3% monthly price drop in June, with sellers facing the toughest competition in a decade. Robert Gardner, Nationwide's chief economist, said the softening was tied to the end of temporary stamp duty cuts, but he still expected activity to pick up over the summer, citing low unemployment, healthy earnings growth and strong household balance sheets.
Financial markets have priced in a 76% chance of a quarter-point rate cut in August, with another cut expected before the end of the year. The average two-year fixed mortgage rate edged down to 5.09% on Tuesday, while the five-year fix held at 5.08%. Tom Bill of Knight Frank noted that the "legacy of the March stamp duty cliff edge" meant high supply and softer demand, but falling rate expectations offered some support.
Regionally, the north-south divide narrowed, with northern England up 3.1% and southern England 2.2%. Among property types, terrace houses saw the largest annual rise at 3.6%, while flat price growth slowed sharply to 0.3% from 2.3%.
