House prices fell by -0.6% in April, according to Nationwide. Annual house price growth sat at 3.4%, slightly below March (3.9%). The passing of the Stamp Duty deadline on 1st April has led to demand softening and some price falls, as is typical following increased Stamp Duty obligations. Price growth is likely to remain muted through Q2.

March saw the fifth highest number of transactions in any month of the last decade. HMRC provisionally reported 164,650 transactions in March, 66% above the 2017-19 average and 89% above March 2024. Transaction numbers have been above the 2017-19 average since the beginning of 2025, and March was ‘crunch time’ for those buyers looking to beat the Stamp Duty changes coming in on 1st April.  Mortgage approvals, as reported by the Bank of England, have trended down over Q1, however they remain just -0.2% below the 2017-19 average.

Activity is likely to be held back over coming months by the uncertain economic picture, which has left buyers unsure about costs. According to a HomeOwners Alliance survey, 37% of respondents expected mortgage rates to go up compared to 16% expecting falls. The erratic introduction of US trade tariffs have raised alarms about a global recession and the International Monetary Fund (IMF) revised its UK growth forecast for 2025 down from 1.6% to 1.1%. These factors, alongside the Stamp Duty change, have dampened buyers’ confidence.

Sub-4% mortgage rates returned to the market in April for buyers with lower loan-to-value mortgages (60% plus) as lenders compete for buyers in the market. Higher loan-to-value products have also seen their interest rates drop. This movement will be supported by Thursday’s decision by the Monetary Policy Committee to cut the base rate to 4.25%.  

Lower mortgage rates will ease affordability pressures, on top of which some lenders have softened their stress tests. Following the Financial Conduct Authority (FCA) clarification around the stress testing regulations, some banks have altered their affordability criteria. This will enable buyers to borrow more, according to Halifax, up to 13% more than previously. Additionally, the FCA is conducting a Mortgage Rule Review on the future of the mortgage market. Without more supply coming to the market, however, this is more likely to translate into greater house price inflation than increased accessibility to home ownership.

House price growth was highest in Scotland. In the year to January 2025, West Dunbartonshire, Renfrewshire, and Moray had the highest growth of 9.4%, 9.0%, and 7.9%, respectively. Coastal regions continue to see the greatest price falls, notably in Torridge (-5.4%), South Holland (-5.0%), and Ceredigion (-4.3%). Only 21% of local authorities saw house price falls during this period compared to over a third in the year to October.