The annual rate of house price growth halved in April as a stamp duty holiday ended, according to Office for National Statistics (ONS) figures.
Prices increased by 3.5% to £265,000 in the 12 months to April, down from 7% in the year to March.
The ONS said that the monthly drop was because of an increase in the tax payable on properties as the stamp duty holiday ended on 31 March for first-time buyers.
Buyers rushed to complete their purchases before the deadline, driving up prices that month.
ONS head of housing market indices Aimee North said: “UK annual house price inflation slowed in April, following changes to stamp duty land tax in England and Northern Ireland.
“The North East once again showed the highest annual increase, and the South West showed the lowest annual growth. London was the only English region where annual inflation rose this month.
Read more: Average UK house asking price drops by more than £1,000
“The rental market continues to cool, with the fifth month of slowing average annual growth across the UK. Private rent prices in Scotland grew at their slowest annual pace in three years.”
Average house prices increased to £286,000 (3.0% annual growth) in England, £210,000 (5.3%) in Wales, and £191,000 (5.8%) in Scotland in the 12 months to April.
The average house price in Northern Ireland was £185,000 in the first quarter of 2025, a 9.5% increase annually.
Within England, the North East saw the biggest increases in house prices in the year to April, at 6.4% — although this was a significant slowdown from 15.3% annual rate seen in March.
Annual house price inflation was lowest in England in the South West, at 0.9%, down from 5.9% in the 12 months to March.
Sarah Coles, a Yahoo Finance UK columnist and head of personal finance Hargreaves Lansdown, said: “For anyone hoping to get onto the property ladder, there’s little hope that property prices will fall to make your life easier.
“It means it’s worth investigating any help you can get — whether that’s the government bonus from the Lifetime ISA, a family mortgage, or more help from the bank of mum and dad.”
London was the only English region where the annual inflation rate of housing prices was higher in April (3.3%) than in March (0.9%).
Nathan Emerson, CEO of Propertymark, said: “The first half of 2025 has proven very different from the expected trends we would normally witness within the housing market each year.
“We had the effect of stamp duty threshold changes across England and Northern Ireland completely altering consumer habits. The housing market witnessed a sizeable uplift in both mortgage approvals and property transactions, as many people looked to complete on their house purchase, leading towards the start of April.