Despite the short-term dip, analysts remain optimistic about the market’s overall resilience.
According to official figures from HM Land Registry, the April decline followed a rush of transactions in the first quarter as buyers sought to complete purchases before tax-free allowances were reduced.
First-time buyers now pay stamp duty on homes worth more than £300,000, down from the previous £425,000 threshold, while home movers saw the tax-free threshold drop from £250,000 to £125,000.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said the April decline isn’t cause for concern.
“The drop was always expected in the aftermath of the stamp duty holiday,” she said.
“This wasn’t a steep climb and a dramatic descent. It was more of a gentle incline followed by a saunter downhill.”
On an annual basis, house prices rose by 3.5 per cent in the 12 months to April, with the average property now costing £265,000 – approximately £9,000 higher than a year ago.
More recent data indicates the market has stabilised since April. Nationwide reported prices rose 0.5 per cent in May after falling 0.6 per cent in April, with annual growth holding steady at 3.5 per cent.
Halifax said there was a small 0.4 per cent drop in May following a modest 0.3 per cent rise in April, suggesting overall stability.
Regional variations continue to shape the UK housing landscape.
Northern Ireland leads with 9.5 per cent annual growth, followed by Scotland (5.8 per cent), Wales (5.3 per cent), and England (3 per cent).
Within England, the North East shows the strongest performance at 6.4 per cent, while the South West lags at 0.9 per cent.
Rural areas have outperformed urban locations in recent years.
Nationwide’s special report revealed that between December 2019 and December 2024, house prices in predominantly rural areas increased by 23 per cent, compared to 18 per cent in largely urban areas.
Robert Gardner, chief economist at Nationwide, said the pandemic had a significant impact on housing demand during 2021 and 2022, with a shift in preferences towards more rural areas, particularly amongst older age groups.
“Whilst these effects have now faded, less urban areas have continued to hold the edge in terms of house price growth,” he said.
Despite April’s transaction volumes plummeting 64 per cent month-on-month, Rightmove data suggests activity rebounded in May, recording the highest number of sales agreed in any month since March 2022.
However, asking prices dropped 0.3 per cent in early June, with London and other expensive southern regions seeing the largest declines.
Colleen Babcock, property expert at Rightmove, said the current conditions are favourable for buyers.
“It’s an encouraging market for those looking to buy, with a very good choice of homes for sale, which also means they have good negotiating power,” she said.
Looking ahead, forecasts remain positive.
Knight Frank recently upgraded its prediction for annual house price growth in 2025 from 2.5 per cent to 3.5 per cent, while Savills projects 4 per cent growth.
Regional disparities are expected to continue, with stronger growth in northern regions where affordability is less stretched.
