The average cost of a property dropped by 0.8 per cent between May and June to £271,619, following a revised 0.4 per cent increase in the previous month, according to the lender’s data published on Tuesday.
The annual growth rate fell to 2.1 per cent, down from 3.5 per cent in the previous month, the slowest since July 2024.
Both figures were below expectations as economists polled by Reuters had forecast a 0.2 per cent month on month increase and a 3.1 per cent annual expansion.
Robert Gardner, Nationwide’s chief economist, said: “The softening in price growth may reflect weaker demand following the increase in stamp duty at the start of April.” However, he expects “activity to pick up” from the summer as “the unemployment rate remains low, earnings are rising at a healthy pace in real terms, household balance sheets are strong and borrowing costs are likely to moderate a little”.
The stamp duty thresholds reverted to pre-2022 levels on April 1, increasing costs for many property buyers and triggering volatility in prices and transactions.
First-time buyers, for example, started paying the levy for properties worth £300,000 or more, instead of the previous threshold of £425,000. For some experts, increasing supply is contributing to the slowdown in prices.
Markets are pricing about a 75 per cent probability that the Bank of England will cut interest rates by a quarter point from the current 4.25 per cent next month. That would mark the fifth reduction in borrowing costs since last summer, even though interest rates remain well above the 2009-2025 average.
Nationwide, which tracks prices based on the mortgages it approves, showed that Northern Ireland remained the top-performing area, with annual house price growth of 9.7 per cent in the second quarter, compared with 2.9 per cent across the UK. East Anglia and London registered the slowest growth rates at about 1 per cent.
The lender also revealed that flats underperformed the rest of the market, registering annual price growth of only 0.3 per cent in the past 12 months. This compares with a 3.6 per cent expansion for terraced houses, a 3.3 per cent rise for semi-detached properties and a 3.2 per cent increase for detached properties.
