Sharp Decline in British House Prices Amid Tax Changes

British house prices fell by 0.6% in April, the largest drop in 18 months, as tax changes influenced transactions. The fall was steeper than forecasted, with experts attributing it to a rush to close deals before increased stamp duty rates. Despite challenges, market activity may rise with warmer weather.

The British housing market experienced a significant shift in April, witnessing a 0.6% drop in house prices, according to Nationwide's data. This decline marks the sharpest monthly fall in over 18 months, following adjustments in property taxation.

The drop surpassed all expectations from a Reuters economists' poll, becoming the first decline since August of last year. Robert Gardner, Nationwide's chief economist, pointed to changes in property taxes as a contributing factor, with many buyers expediting purchases to avoid increased tax burdens.

The government's new stamp duty thresholds, effective from April 1, have reshaped the landscape for homebuyers, sparking a temporary surge in transactions in March. As summer approaches, experts anticipate an uptick in housing market activity, despite ongoing economic uncertainties and a potential interest rate cut by the Bank of England.

(With inputs from agencies.)