Stamp Duty Land Tax changes affected house price base effects

UK house price annual inflation slowed to 2.7% in the 12 months to May 2026, down from 3.9% in the 12 months to April 2026, with the average UK house price at £271,000¹. The Office for National Statistics (ONS) attributed the slowdown to a base effect from the aftermath of the Stamp Duty Land Tax changes in England and Northern Ireland on 1 April 2025¹. Average UK prices rose 0.3% between April and May 2026, against 1.5% in the same period a year earlier¹.

In England, annual house price inflation fell to 2.3% in the 12 months to May 2026, from 4.0% in the 12 months to April 2026, with the average price at £292,000¹. The ONS said the slowing was caused by a base effect from a 0.1% monthly rise in May 2026 compared with a 1.8% rise a year earlier, which it linked to the aftermath of the SDLT changes¹. Wales recorded annual inflation of 4.2% (£215,000) and Scotland 4.4% (£196,000) over the same period, both higher than the previous month¹. Northern Ireland's average house price was £198,000 in Quarter 1 (January to March) 2026, up 7.4% on a year earlier¹.

The ONS described the mechanism in its bulletin:

The same bulletin reported that average UK monthly private rent rose 3.3% to £1,388 in the 12 months to June 2026, unchanged from the 12 months to May 2026¹. Average rents were £1,446 (3.4%) in England, £843 (4.9%) in Wales and £1,012 (1.3%) in Scotland in the 12 months to June 2026, and £877 (2.9%) in Northern Ireland in the 12 months to April 2026¹. Rent annual inflation was highest in the North East at 6.3% and lowest in London at 2.2%¹.

Source: ONS, Private rent and house prices, UK: July 2026¹

The ONS notes that UK HPI first estimates are provisional, based on sales volumes reflecting around 48% of all sales in Great Britain in May 2026, and that revisions may be larger than those seen historically¹. PIPR data became official statistics on 20 May 2026, having previously been designated in development¹. The ONS advises caution when comparing Scotland and Northern Ireland rent estimates with other UK countries because of data collection differences¹.

Why it matters for households

The figures describe what has already happened to average prices and rents, not what will happen next. The May 2026 slowdown in annual house price inflation is a comparison with a year earlier, when activity shifted around the 1 April 2025 SDLT deadline in England and Northern Ireland; it does not mean average prices fell in May 2026, as the ONS reports a 0.3% monthly rise¹. Buyers and sellers in England and Northern Ireland are affected by the tax rules set on 1 April 2025, while Scotland and Wales operate separate property taxes, covered in the comparison of property purchase taxes across the UK¹. Renters are affected by the rent figures: UK annual rent inflation was 3.3% in the 12 months to June 2026, unchanged on the previous month, with the average UK rent at £1,388¹. Northern Ireland rent data cover advertised new lets only, and the latest available month was April 2026¹.

What happens next

The ONS said the next release of the bulletin was due on 19 August 2026¹. UK monthly rent estimates for the latest two months and HPI estimates for the latest 12 months are provisional and subject to revision¹.