The average UK house price fell by £5,000 in April after reaching a record high in March, according to official figures.
The typical property value was around £251,000 in April, following a peak of £256,000 on average in March, Office for National Statistics (ONS) figures show.
However, the average house price in April was still £20,000 higher than a year earlier.
The annual rate of house price growth slowed in April to 8.9%, from 9.9% in March.
The ONS suggested that an original March stamp duty holiday deadline, which was later extended, may have inflated the house price figures for that month.
As the tax break was originally due to conclude at the end of March, it is likely that this inflated March’s average house prices as buyers rushed to ensure their house purchases were scheduled to complete ahead of this deadline, the report said.
It pointed to HM Revenue and Customs (HMRC) house sales figures showing around 183,170 transactions took place in March – the highest on record. But in April there were around 117,860 sales – a fall of more than a third (36%).
The stamp duty break in England and Northern Ireland will remain fully in place until the end of June and then be tapered until October 1, when it will revert to normal levels.
A similar property tax holiday in Wales will end on June 30 and one in Scotland ended on March 31.
Sam Beckett continued: (2/3) pic.twitter.com/9mXhS7KU4l
— Office for National Statistics (ONS) (@ONS) June 16, 2021
ONS head of economic statistics Sam Beckett said: “UK average house prices fell on the month in April, ending 11 consecutive months of growth.
“Last month’s figure was probably inflated as buyers rushed to complete purchases because the tax breaks on housing transactions were initially due to conclude at the end of March.”
Average house prices increased over the year in England to £268,000 (8.9%), in Wales to £185,000 (15.6%), in Scotland to £161,000 (6.3%) and in Northern Ireland to £149,000 (6.0%).
The North East was the English region with the highest annual house price growth, with average prices surging by 16.9% in the year to April.
The North East continued to have the lowest average house price in England, at £144,000, having surpassed its pre-economic downturn peak of July 2007 in December 2020.
For the fifth month in a row, London was the region with the lowest annual growth (3.3%).
London’s average house prices remain the most expensive of any region in the UK at an average of £492,000 in April.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “House price growth in the North East continues to outperform the rest of the country, while London continues to lag. While property prices in the capital remain significantly higher than elsewhere, some levelling up of prices with elsewhere in the country is welcome, helping to create a more balanced housing market.”
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics) said: “Looking forward, our experiences on the ground tell us that market activity is set to continue at similar levels at least for the next few months, although increasing sales instructions will result in some price softening rather than a correction.”
Jamie Durham, an economist at PwC, said: “UK price growth continues to be supported by a shift in preferences to more spacious properties, the accumulation of more than £140 billion of savings over the last year, and low interest rates.
“We expect that these forces will continue to support price growth over the coming months, even as the stamp duty holiday winds down at the end of the month.
“Our latest modelling suggests prices could increase by 5% to 7% on average this year, which is significantly above recent years, and could rise by up to 4% next year.”
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said the figures are “a handy reminder that prices can go down as well as up, which is worth bearing in mind if you’re buying at the moment, and the current property drought means you have been sucked into a bidding war and are set to pay more than you can afford”.
Nick Leeming, chairman of estate agent Jackson-Stops, said: “We still saw 13 buyers chasing every instruction across our branches in April. These buyers are very unlikely to meet the Government’s stamp duty deadline and are proof that the market will remain strong during the second half of the year, after the incentive has ended.”
Nitesh Patel, strategic economist at Yorkshire Building Society, said: “Demand continues to outstrip supply, driven by the stamp duty holiday, low borrowing costs and improving earnings growth, whilst the number of homes coming on to the market remains low.
“That said, changing consumer tastes are perhaps having a bigger impact, particularly for home movers with plenty of equity. Buyers are looking for more space, both inside and outside their homes, and many appear to have become more flexible on location, which may be driving activity in regions where you get more bang for your buck.”