UK house price growth experienced a slowdown in August, marking a decrease to approximately its slowest rate in a year, according to data from lender Nationwide. The average price of a home in the UK increased by 2.1% in the year ending in August, down from an annual growth rate of 2.4% recorded in July. This latest growth rate aligns with what was observed in June and is the slowest growth rate since July 2022.
The decline in growth coincides with reports that the UK government is contemplating a significant reform of property taxes in an effort to enhance revenue and stimulate the housing market, potentially as part of the upcoming autumn Budget. Robert Gardner, chief economist at Nationwide Building Society, emphasized the need for a tax system that facilitates more effective mobility in the housing market, suggesting that it is indeed worthwhile to examine UK property taxes.
The current average price of a home in the UK is reported to be £271,079 based on Nationwide’s mortgage data. Despite the recent decrease in the growth rate, Gardner noted that housing remains unaffordable for many, as high prices relative to household incomes continue to make it difficult for potential buyers to raise deposits, particularly in light of ongoing cost-of-living challenges.
The government is reportedly exploring various options for rewriting housing tax regulations. Proposed changes include instituting National Insurance taxes for landlords, eliminating capital gains tax relief on higher-value homes, scrapping stamp duty, and substituting council tax with a national property tax. The expert opinions on such changes vary, with some asserting that the removal of stamp duty could invigorate the housing market, although it may result in significant losses in tax revenue.
Source: https://www.bbc.com/news/articles/cdrk1411ygdo?at_medium=RSS&at_campaign=rss