LONDON (Reuters) – British house prices fell in January for the first time in seven months, before the scheduled March 31 end of a tax cut for buyers, mortgage lender Nationwide said on Tuesday, adding that the market could weaken sharply in the months ahead.

House prices fell by a monthly 0.3%, slowing the pace of their annual increase to 6.4% from 7.3% in December, which was their biggest jump in six years.

Economists polled by Reuters had expected a monthly increase of 0.3% and a 6.9% rise in annual terms.

“To a large extent, the slowdown probably reflects a tapering of demand ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase,” Robert Gardner, Nationwide’s chief economist, said.

“If the stamp duty holiday ends as scheduled, and labour market conditions continue to weaken as most analysts expect, housing market activity is likely to slow, perhaps sharply, in the coming months.”

Demand for housing surged after Britain’s first coronavirus lockdown last year, helped in part by the temporary exemption of property purchase taxes as well as people seeking bigger homes in response to the lockdown restrictions.

On Monday, data from the Bank of England showed British mortgage approvals remained close to a 13-year high in December.

British media have reported that finance minister Rishi Sunak might extend the tax break and support for the labour market as he seeks to help the economy through the COVID-19 pandemic.

(Writing by William Schomberg; Editing by Kate Holton and John Stonestreet)