UK house prices fell by 2.7% in April compared with the previous month, according to the latest official figures, marking the steepest monthly decline in nearly a year and underlining the fragility of the housing market amid ongoing economic uncertainty.
Figures from the Office for National Statistics (ONS) show that the average UK house price stood at £265,000 in April 2025 – a decrease of £7,500 compared to March.
Despite the monthly fall, prices remain £9,000 higher than a year earlier, with annual house price inflation recorded at 3.5%, down sharply from 7.0% in March.
Scotland and Northern Ireland posted the strongest annual gains, with prices up 5.8% and 9.5% respectively. Wales recorded a 5.3% rise, while England, home to the most transactions, saw more modest growth of 3.0% year-on-year. Within England, the North East led with 6.4% annual inflation, while the South West recorded the lowest at 0.9%.
DRAMATIC DROP
The monthly fall in prices coincided with a dramatic drop in transaction volumes, which were down 63.5% on a seasonally adjusted basis from March.
Only 65,000 residential property transactions over £40,000 were recorded in April – 28% fewer than the same month last year, according to HMRC.
The plunge in completions followed a rush to beat changes to Stamp Duty Land Tax (SDLT) that took effect on 1 April.
Transaction volumes were particularly affected in England and Northern Ireland, which saw respective non-seasonally adjusted declines of 70.7% and 60.3% month-on-month. In contrast, Scotland and Wales were less affected, with smaller drops of 9.1% and 19.1% respectively.
CONTINUED WEAKNESS
Market indicators point to continued weakness. The Bank of England reported that mortgage approvals fell for the fourth consecutive month, dropping to 60,500 in April, down 3,100 from March.
Meanwhile, the Royal Institution of Chartered Surveyors (RICS) reported a further deterioration in housing market sentiment, with activity “slipping deeper into negative territory.”
In its Q1 Agents’ summary, the Bank of England also reported subdued buyer interest, with economic uncertainty dampening demand despite the stamp duty changes. Analysts said the April downturn reflects a broader trend of hesitancy among both buyers and sellers as the market adjusts to higher borrowing costs and inconsistent signals on future interest rates.
While the headline inflation rate remains positive, the combination of falling monthly prices, sliding approvals, and slowing transaction activity raises questions about the sustainability of recent house price gains. The UK House Price Index (HPI), now rebased to January 2023 (=100), stood at 101.7 in April.
The next update to the HPI, including data for May 2025, will be published on Wednesday 16 July.
INDUSTRY REACTION
Richard Donnell, Executive Director of Research at Zoopla, says: “Rental inflation is slowing as demand cools on lower migration and improved affordability for first time buyers rather than any increase in rent supply.
“We expect the rate of rental inflation to slow in the coming months which will be welcome news for renters. Rental inflation for those taking new tenancies are rising at their slowest rate for four years.
“The big decline in the rate of house price inflation reflects the ending of the stamp duty holiday which is now filtering through into slower price growth.
“We expect the rate of price growth to slow further over 2025 as home buyers face a large choice of homes for sale which will support a buyers’ market.
“Home prices in the midlands, northern England and Scotland will continue to rise more quickly than across southern England where affordability is a drag on price rises.”
NO SURPRISE
Iain McKenzie, Chief Executive of The Guild of Property Professionals, says: “The ONS data showing a moderation in annual house price growth to 3.5% comes as no surprise and reflects a predictable market rebalancing, rather than a fundamental slowdown.
“The market experienced an exceptional, tax-driven transaction frenzy in March, which inevitably pulled activity forward and created a statistical drop in April.
“The headline figure, however, masks the true story of a market showing underlying strength and resilience. The fundamentals for a healthy housing market are not only in place but are improving.
“Demand remains and is growing, with Zoopla reporting the number of sales agreed in May reached a four-year high. While this demand is being met by a 13% increase in the supply of homes for sale, this is a positive development. It creates a more balanced and sustainable market, giving buyers greater choice and keeping prices in check. It’s a sign of health, not weakness.
“While the Bank of England is expected to hold rates today, the overall interest rate cycle is on a downward trend.”
“While the Bank of England is expected to hold rates today, the overall interest rate cycle is on a downward trend.
“More importantly for buyers, lenders have already begun to relax affordability criteria and revise stress-testing, in some cases boosting borrowing power by up to 13%. This tailwind that will play a crucial role in driving transactions for the remainder of the year.
“The stamp duty rush created a temporary statistical blip. The market has now digested those changes and is returning to a strong, sustainable rhythm. With steady demand, improving affordability, and more choice for buyers, the UK housing market is on a very firm footing for the rest of 2025.”
NOT THE WHOLE STORY
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “It might seem as though this data shows considerable housing market resilience but it doesn’t tell the whole story.
“Although the most comprehensive of all the surveys as it includes cash and mortgaged transactions, the results reflect what was happening over the last few months.
“Since then stock levels have continued to rise, resulting in more balance between supply and demand so softening prices and lengthening transactions.
“Looking forward, values are likely to continue to reduce a little inevitably as interest rates will not fall as far and as fast as many had expected as inflation stays stubbornly high despite today’s small dip.”
“The inevitable result is a rise in rents with little prospect of a reduction anytime soon.”
“Rents are demonstrating little sign of reducing from their inexorable and steady rise. The numbers are supported by lack of stock and urgent need for accommodation from tenants who are finding lack of choice hard to deal with.
“The inevitable result is a rise in rents with little prospect of a reduction anytime soon, particularly as the Renters’ Rights Bill will probably persuade more landlords to sell when it becomes law later in the year.”
RISING RENTS
Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, said: “Tenants will undoubtably welcome the moderation of average monthly rents, but this remains elevated following the record high seen last quarter.
“The supply of privately rented homes continues to be below the levels seen before the pandemic and substantially outstripped by demand, a dynamic that will see rents continue to rise above the rate of inflation.
“The need for privately rented homes will be sustained by predicted population increases and changes to household formation, with more people choosing to live alone or remain in the sector for longer. For this reason, investment in stock must be encouraged and facilitated by favourable economic conditions and balanced regulation.”
FIRST-TIME BUYER BOOST
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “A modest uptick in property prices is to be expected given that the spring/summer market is traditionally a time when people move and the market is at its busiest.
“Unfortunately, another interest rate cut today is unlikely given the inflation figures, which is disappointing as a half-point cut would stimulate growth.
“However, there’s still plenty of money and desire to buy in the core price ranges. Surprisingly, we are seeing a rise in first-time buyer activity even though the stamp duty holiday has ended.
“Many are receiving help from family and are likely being driven by the pressures in the rental market, where demand far exceeds supply and rental listings have dropped sharply as landlords exit the sector.”
STAMP DUTY CHANGES
Darrell Walker, Group Sales Director at Chetwood Bank for ModaMortgages and CHL Mortgages for Intermediaries, says: “Today’s data was always going to be of interest, as it covers the immediate aftermath of the stamp duty changes.
“The month-on-month dip in house prices in April was to be expected, but it’s also important to remember that average prices are still up on last year.
“Consistently strong buyer demand, coupled with limited supply, means that the market remains in a strong position, albeit with some question marks around the cost of borrowing.
“With the Bank of England expected to hold the base rate at 4.25% today, taking a conservative approach amidst persistent inflation and global uncertainty, there are likely to be some prospective buyers who are sitting tight and waiting for rates to come down before entering the market.
“Offering greater flexibility, and providing certainty wherever possible will be crucial in driving the market forward.”
“That’s why lenders and brokers must work together to help combat any such inertia. There’s still a lot of positive sentiment in the market and it’s about supporting buyers and investors to execute their plans with confidence.
“Speeding up processes, offering greater flexibility, and providing certainty wherever possible will be crucial in driving the market forward over the summer months.”
CHALLENGING HEADWINDS
Paresh Raja, CEO of Market Financial Solutions, says: “Though fighting against some challenging economic and geopolitical headwinds, the property market remains in a strong, stable position.
“All eyes remain on interest rates, with expectations that they will fall over the coming year, even if the Bank of England decides to hold the base rate at 4.25% tomorrow, as seems likely.
“Ultimately, it was always going to take time for buyers and investors to adjust to the base rate rising from record-lows to 17-year highs, but all signs suggest that they have adapted over the past year or so, and the steady rise in house prices underlines that demand is still there.
“If indeed we do see one or two more base rate cuts by the end of the year, the strong foundations are there for the market to really kick on from.
“Lenders have to be responsive. Products must adapt in line with the needs of borrowers and the economic conditions, ensuring brokers and borrowers can move at speed and get deals done.”
ACTIVITY DROP
Karen Noye, mortgage expert at Quilter, says: “UK house prices fell sharply in April, with the average property dropping 2.7% in value over the month to £265,000. Despite an annual rise of 3.5%, that figure is down from 7.0% in March but should be interpreted with caution given the recent volatility in the data.
“The steep monthly decline reflects a sharp drop in market activity following the end of the stamp duty holiday on 1 April. Many buyers rushed to complete transactions in March ahead of the change, leading to a distorted surge followed by a significant slowdown in April. HMRC data confirms that residential transactions fell by over 60% month-on-month on a seasonally adjusted basis.
“The ONS has highlighted that April’s house price figures are provisional. Just 44% of HMRC’s expected sales volume had been captured at the time of publication, which increases the risk of future revisions.
“There is also greater uncertainty around new build prices, which are often slower to be reflected accurately in the index.
“Regionally, Northern Ireland continued to lead the market with annual growth of 9.5%, while Scotland and Wales also posted robust increases. London, interestingly, saw a 2.6% monthly rise, although this is likely due to compositional quirks in a low-volume month rather than a broader recovery. In contrast, regions like the North East experienced steep monthly falls, down 8.1%, reinforcing the volatility in the short-term data.
“Underlying conditions remain challenging.”
“Underlying conditions remain challenging. Mortgage approvals for house purchases fell for a fourth consecutive month in April, dipping to 60,500 according to the Bank of England. While fixed-rate deals have eased slightly in recent months, average rates remain well above their pre-2022 levels, keeping affordability under pressure.
“The Bank of England is widely expected to hold rates steady again at tomorrow’s meeting, meaning mortgage holders are unlikely to see significant drops in borrowing costs in the near term.
“Affordability continues to weigh heavily on demand, particularly for first-time buyers, and the new government’s stance on housing policy and taxation will be key in shaping sentiment as the year progresses.”
