Annual house price growth slowed to 10.5 per cent in July, from the 17-year high of 13.4 per cent recorded the previous month. In month-on-month terms, house prices fell by 0.5 per cent, after taking account of seasonal effects, following a 0.7 per cent rise in June.
Commenting on the latest figures from the Nationwide Price Index, the building society’s chief economist, Robert Gardner, said: “The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6 per cent a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.”
The tapering of stamp duty relief in England is also likely to have taken some of the heat out of the market. The nil rate band threshold decreased from £500,000 to £250,000 at the end of June, and will revert to the original figure of £125,000 at the end of September.
“This provided a strong incentive to complete house purchases before the end of June, especially for higher priced properties,” Mr Gardener said. For those purchasing a property above £250,000, the maximum stamp duty saving reduced from £15,000 to £2,500 after the end of June.
The stamp duty changes drove the number of housing market transactions to a record high of almost 200,000 in June as home buyers rushed to beat the deadline. This was around twice the number of transactions recorded in a typical month before the pandemic and eight per cent above the previous peak seen in March.