"Policy cliff" effect leads to sharp decline in UK property market, with house prices in April recording the largest drop since 2021.

The latest data from the UK National Statistics Office shows that, affected by changes in stamp duty policy, the national average house price in the UK saw the largest monthly decline since 2021 in April, falling to an average of 265,000 (approximately $356,000), a 2.8% decrease compared to March. This is the first time that house prices have fallen since December 2023, and the drop is the largest since the outbreak of the COVID-19 pandemic. It is worth noting that although the year-on-year growth is still maintained at 3.5%, the growth rate has significantly slowed compared to previous periods, reflecting a significant weakening of market momentum. Market analysis points out that this price correction is closely related to previous policy changes. Before the deadline for the stamp duty increase at the end of March this year, the concentrated release of housing demand pushed up prices for that month, creating a temporary "policy cliff" effect. Chris Barry, head of the real estate department at Thomas Law Firm, explained: "The unusually active trade at the beginning of the year has depleted some purchasing power, leading to an inevitable market adjustment after the policy transition period. It is expected that the UK housing market will experience a period of consolidation for several months, with little sign of near-term recovery." The regional differentiation feature has become more pronounced in this round of adjustment. As the only region with rising house prices, London saw a 3.3% year-on-year increase in house prices in April, significantly expanding from the 0.9% growth in March, highlighting the resilience of the capital's market. However, other regions across the country are generally under pressure, with an oversupply situation continuing to suppress price performance. Tom Bill, head of residential research at Knight Frank UK, pointed out: "The current market is still in the recovery stage after the policy transition, the oversupply issue has not been alleviated, which will continue to constrain the upward momentum of house prices." It is worth noting that although mortgage lenders Halifax and property platform Rightmove's earlier data showed that house prices did not cool down as expected in April, the official statistics and feedback from real estate agents confirm that after the implementation of the tax increase policy, housing transaction volumes have dropped to the lowest level in two years. This difference in data may be due to differences in statistical methods: official data is based on completed transactions, while market institution data may include intended prices that have not yet been finalized. Looking ahead, the industry generally expects that the market trend in the second half of the year will depend on the direction of monetary policy. The Bank of England will announce its latest interest rate decision this week, and the pace of interest rate cuts will be a key variable affecting housing costs. Tom Bill believes: "Although the probability of a rate cut before August is low, the weak economic trend is driving mortgage rates down, which will support housing demand to a certain extent." Real estate agents generally expect that as borrowing costs gradually decrease, market demand is expected to improve by the end of the year, but full recovery will still take time.