UK Housing Market Sees Sharp Dip Amid Economic Uncertainty

The British housing market experienced a notable decline in June, as house prices fell by 0.8%, marking the steepest monthly drop in over two years. This decline was unexpected, as economists had forecast a 0.2% increase. The downturn coincides with the conclusion of property transaction discounts.

Annual growth in house prices reached 2.1% in June, falling short of the 3.5% increase seen in May and the anticipated 3.1% rise. According to Robert Gardner, Nationwide's chief economist, the softening in price growth is likely due to weaker demand following an increase in stamp duty in early April.

Despite ongoing economic challenges and the end of the discount scheme for first-time buyers, housing activity is expected to rebound over the summer. The Bank of England's recent data showed an unexpected rise in mortgage approvals in May, driven by lower borrowing costs. The central bank is anticipated to make further rate cuts by year's end.

(With inputs from agencies.)