Mon, 01 Sep 2025

Mon, 01 Sep 2025 House price growth slows as calls mount over tax reform

The average home in the UK cost £271,079 in the year to August, according to Nationwide.
UK house price growth slowed down to 2.1% in August, according to Nationwide data, with a 0.1% decline compared to July's month-on-month measure. The government is reportedly considering an overhaul of property taxes, including stamp duty and capital gains tax, to boost the housing market and raise revenue. Experts have mixed views on the potential changes, but some argue that replacing stamp duty could speed up the market while costing billions in lost tax revenue. The average UK home price now stands at £271,079, with cash buyers accounting for about a third of sales. The slowdown in house price growth is attributed to various factors, including high mortgage costs, which are three times higher than pre-pandemic levels, and making monthly repayments challenging for prospective buyers. However, further interest rate cuts by the Bank of England could ease mortgage rates, and incomes may outpace house prices. According to Nationwide, house prices are still high compared to household incomes, making it difficult for many buyers to afford a home. Some experts suggest that the housing market is "catching its breath" rather than changing direction, but sustained momentum will depend on future interest rate decisions and policy changes. The UK needs a tax system that allows people to move more effectively, according to Nationwide's chief economist Robert Gardner. The government's consideration of property tax reforms may bring some relief to the housing market, but it remains to be seen what impact these changes will have.
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