The rush of buy-to-let investors who came to market in March to get themselves rental stock before April 1st's three per cent Stamp Duty levy was introduced, created an annual house price rise that simply could not be matched in April, it has been reported.
In the latest house price index released this week by Nationwide, it was revealed that the cost of buying a home in the UK now comes in at an average of some £202,436. While this still represented month on growth, the pace at which March's prices had risen when compared to a year before could not be reached in April.
The prices Nationwide recorded in April were some 0.2 per cent higher in March, but the fact that landlords were not buying in droves in the same way as they were in March, when transaction levels hit an all-time record of some 165,400, meant it could not live up to the 5.7 per cent annual rise rate recorded last month.
However, Nationwide's chief economist Robert Gardner said the 4.9 per cent year-on-year rate of growth that was recorded in April is nothing to worry about, even if it is lower than what we saw in March. This figure is actually at the top end of the three to five per cent growth window that property has been in constantly since mid-summer 2015, with March being the only exception.
"It may be that the surge in house purchase activity resulting from the increase in Stamp Duty on second homes provided a temporary boost to prices in March. However, 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," Mr Gardner said.
"The increase in mortgage lending is likely to have been driven by a sharp increase in buy-to-let investors bringing forward their purchases before the Stamp Duty changes took effect," he added.