UK June home prices decline on tax cut
British home prices dropped in July following a trim down of a coronavirus emergency tax break for buyers at the end of June. However, mortgage lender Nationwide said pandemic-driven demand for bigger homes will support the market.
House prices decelerated for the first time since March with a 0.5% crash from June. This slowed the annual increase to 10.5% from June’s climb of 13.4%, the steepest rise in 17 years.
Economists initially expected a price increase of 0.6% from June and by 12.1% in annual terms.
Nationwide’s chief economist Robert Gardner said housing transactions hit a record in June driven by the full tax break. However, savings from this benefit had been overshadowed by the house price surge.
As part of the incentive program, exemptions from the stamp duty tax were given to the first 500,000 pounds ($693,850.00) of any property purchase in England or Northern Ireland until the end of June. It was scaled back to 250,000 pound until the end of September.