The UK housing market is struggling to recover after the tax change on April 1 - Photo: THE TIMES
Prices stabilised in June following the end of a temporary homebuyer support scheme and ongoing concerns about the economy , data from Halifax, one of Britain's biggest mortgage lenders, showed.
Economists predict house prices will not grow much after the 0.3% decline recorded in May.
Housing market still slow to recover
The housing market has been growing steadily throughout 2024 as mortgage rates have fallen, but stamp duty changes that came into effect in April, coupled with a weak economy and sluggish jobs market, have derailed the recovery in recent months.
Last week, Nationwide, another major mortgage lender, also reported house prices fell 0.8% in June.
Halifax estimates the average UK house price at £296,665, down £2,150 from January. House prices are still 2.5% higher than a year ago, but this is the slowest annual rate of inflation since July last year.
"The stagnation in the Halifax house price index in June suggests that the housing market is still slow to recover due to the stamp duty increase on 1 April and the weak economy," said Ashley Webb, UK economist at Capital Economics.
He expects house prices to rise by 3.5% by 2025 but this may now be “too optimistic” as the market recovery “is not coming soon enough”.
Many challenges remain
Some parts of the UK are doing better than others. However, Northern Ireland remains the UK property hotspot, with house prices rising 9.6% over the past year.
In contrast, average house prices in the South West of England have risen by just 0.5% over the past 12 months. In London, house price inflation has been 0.6% year-on-year. Of the UK regions, the North West has seen the highest rate of property price inflation, rising by 4.4% over the year.
“The further away from London you go, the more steep the price declines tend to be,” said Adrian Kearsey, construction industry analyst at Panmure Liberum.
A sudden rise in mortgage rates in late 2022 caused the market to slow down, although activity began to pick up again throughout 2024 as rates fell and market sentiment improved.
Mortgage approvals and transactions have picked up in recent weeks, helped by rising wages and easing affordability assessments, and Halifax said first-time homebuyer numbers had returned to pre-stamp duty levels.
“Challenges remain,” Bryden added. “Affordability remains limited, particularly for those nearing the end of their fixed-rate contracts. The economic backdrop remains uncertain. Inflation has eased but remains above target and there are signs of a slowing job market.”
Financial markets still expect the Bank of England to cut interest rates two more times this year and if that happens, Bryden predicts “modest house price growth” between now and the end of 2025.
Source: https://tuoitre.vn/gia-nha-o-anh-kho-phuc-hoi-sau-thay-doi-thue-truoc-ba-20250713162543947.htm
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