The latest house price data feels about as clear as mud. According to Rightmove, there was a smaller than usual monthly increase of 0.6 per cent in May, leaving prices up just 1.2 per cent on this time last year. But by Nationwide’s measure, annual house price growth was a more buoyant 3.5 per cent. And according to the official UK House Price Index (HPI), the latest monthly rise was 1.1 per cent, leaving house prices 6.4 per cent higher year on year.
| Index | Rightmove | Nationwide | UK HPI |
| Monthly house price increase (%) | 0.6 | 0.5 | 1.1 |
| Annual house price increase (%) | 1.2 | 3.5 | 6.4 |
How stamp duty stumped house price indices
There are discrepancies between the house price indices at the best of times because they all measure slightly different things. As a property listings portal, Rightmove tracks new seller asking prices, providing us (along with Zoopla) with a very timely measure. Nationwide (and Halifax) measure prices based on mortgage lending at the post-survey approvals stage. These are relatively up to date, but record transactions weeks later in the process than the property portals. They also have the disadvantage of excluding cash sales, which account for a staggering 30-40 per cent of all transactions.
The UK HPI tracks completed sales (rather than advertised or approved prices) and therefore takes all buyers into account. It’s an extremely comprehensive measure, but comes with significant time lags. The latest Rightmove and Nationwide releases use May data. The most recent HPI tracks transactions that completed in March, on properties that would have been listed several months before that.
These differences are particularly relevant at the moment thanks to April’s stamp duty changes. From 1 April, the nil-rate threshold at which the duty applies fell from £250,000 to £125,000, or from £425,000 to £300,000 for first-time buyers. This triggered a surge of transactions in March as buyers moved purchases forward to take advantage of the higher thresholds (see chart below). Since then, activity has stalled: net mortgage approvals fell to 60,500 in April – a monthly drop of 3,100.
As a result, the end of the stamp duty holiday currently runs like a faultline through our house price data. The UK HPI reflects the pre-April surge, while more timely measures such as the Nationwide and Rightmove indices reflect the inevitable post-April lull.
Where will UK house prices go for the rest of the year?
Projections by forecasters collated by the Treasury suggest that house prices will grow by just 1.3 per cent in 2025. Capital Economics is at the more optimistic end of the spectrum, forecasting growth of 3.5 per cent. But there are clear downside risks: Ruth Gregory, deputy chief UK economist, notes that mortgage approvals have fallen not just month on month, but for the third consecutive month in a row. This hints at genuine weakness in the UK housing market, rather than just temporary timing effects from stamp duty changes.
And although it’s only the start of June, speculation about the Autumn Budget will weigh on sentiment over the summer. Economists at Deutsche Bank think that “tax rises look like a near certainty”, with the June Spending Review doing little to alleviate fiscal pressures. James Sproule, chief UK economist at Handelsbanken warns that significant tax rises in the autumn will shake consumer confidence, as well as hitting the higher earners, who are most likely to be housebuyers. With the stamp duty surge well and truly over, and base rate cuts not arriving as quick as some had hoped, prices look set to flatline for the rest of the year.
