House prices fell 0.5% in June

House prices fell month-on-month by 0.5% in June as the deadline for full stamp duty land tax relief approached, according to Halifax.

The mortgage lender, in its monthly house price index, said average prices across the United Kingdom fell for the first time this year.

The average price recorded was £260,538, which was still £21,000 higher than in June last year.

The monthly fall, and the decrease in the rate of growth, from 9.6% to 8.8% was in part due to the 30 June deadline for full tax relief from Stamp Duty Land Tax, Halifax said.

“With the stamp duty holiday now being phased out, it was predicted the market might start to lose some steam entering the latter half of the year, and it’s unlikely that those with mortgages approved in the early months of summer expected to benefit from the maximum tax break, given the time needed to complete transactions” said Russell Galley, managing director of Halifax.

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The threshold at which buyers are required to pay stamp duty was reduced at the end of June from £500,000 to £250,000 for three months. It will then be cut its pre-pandemic level of £125,000 on 30 September as the covid-19 payment ‘holiday’ comes to an end.

The findings from Halifax echo another index published last week by Zoopla, which suggested that demand for properties has dipped by a third since April but is still much higher than pre-pandemic levels.

However another index, published by Nationwide last week, showed prices rose by 13.4% in June compared to the same period in 2020. This was the largest annual increase recorded by the lender in 16 years. It said the rise was partly due to Covid-19 supressing prices in June 2020.