Figures from Nationwide have revealed that house prices rose in April but a significantly slower rate than in previous months, with the average UK property rising by 0.2% according to the nation’s largest building society.

Nationwide figures show that the average price paid for a property during the month had increased to a new high of £202,436 with the average property price rising to over £200,000 for the first time in March. While there was a continual rise in the overall value of property, the figures from April represented the lowest growth since November last year with the annual pace of house price growth slowing to 4.9% in April, compared with 5.7% in the previous month.

Property Boom in the UK Ahead of Tax Reforms

While some experts have stated that the figures show that there is a lack of demand for property, others have said that the slight dip in growth was expected due to the uncertainty that came with new stamp duty being introduced in England. Many commentators stated that the growth, even though it was marginal showed that the property market in the UK was in good health, especially considering that there had been a boom in the real estate market before the upcoming stamp duty introduction in April.

This theory was backed up by the fact that HMRC figures show there were more than 165,000 transactions in March this year, more than double the number from 2015, implying that the slower growth may have been due to the boom in the previous month. Indeed, the peak in sales was the highest ever since records began as home owners attempted to purchase property before the new stamp duty.

Nationwide’s chief economist, Robert Gardner, said: “This slowdown returns the annual pace of house price growth to the fairly narrow range between 3% and 5% that had been prevailing since the summer of 2015.

“It may be that the surge in house purchase activity resulting from the increase in stamp duty on second homes from 1 April provided a temporary boost to prices in March.”

Gardner also predicted that the number of properties sold were likely to fall in the future with new buy-to-let rules and the new stamp duty regulations, although he also stated that other factors may balance out the number of properties and drive property sales up. He said: “It is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will tilt the demand/supply balance in favour of sellers and exert upward pressure on price growth once again in the quarters ahead.”

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