UK house price growth has dropped to its slowest pace in fourth months, new data shows, as the end of the temporary stamp duty holiday ended a boom in the property market.
Halifax said on Friday that annual house price growth in the UK slowed to 7.6% in July, down from 8.7% in June. July's reading was the lowest since March.
The slowdown came as a tax break on property transactions came to an end. The chancellor announced a stamp duty holiday in July 2020 that ended in June.
"This easing was somewhat expected given the strength of price inflation seen last summer, as the market began its recovery from the first lockdown, and with activity supported by the start of the stamp duty holiday," said Russell Galley, managing director at Halifax.
"In cash terms, typical prices now stand at just over £261,000 ($363,324), a little below May’s peak but still more than £18,500 higher than a year ago."
Wales and the North of England recorded the strongest house price growth across the UK. Prices rose by 13.8% in Wales, which was the highest monthly increase since 2005. London saw some of the weakest price growth, at just 2.5%.
"Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008. This has been fuelled both by the ‘race for space’ and the time-limited stamp duty break," Galley said.
"With the latter now entering its final stages (the zero percent rate only applies to the first £250,000 of the purchase price, before reverting back to standard rates from October), buyer activity should continue to ease over the coming months, and a steadier period for the market may lie ahead."
Galley said house price growth was likely to remain positive for the rest of the year thanks to a limited supply of properties on the market, high consumer confidence, and a recovering economy.
"Overall, assuming a continuation of recent economic trends, we expect the housing market to remain solid over the next few months," he said.
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