House prices fall in April after March's landlord rush for stock

House prices fall in April after March's landlord rush for stock [Photo: adempercem via iStock]

The price of property in the UK fell slightly in April as the market corrected the price hike that had been in evidence in March during the rush for properties caused by landlords. 

Those in the private rented sector had been increasingly snapping up rental homes in March in order to beat the Stamp Duty levy, which came into effect from the start of April. This rush for homes caused a sharp rise in prices as landlords pushed demand higher and tried to rush through purchases. 

However, it has also meant a fall again in April as this quick rise in demand calmed. According to the latest data released this week by Halifax, prices in April were around 0.8 per cent lower than those witnessed in March. This also meant that the annual rate of growth in prices experienced a drop, falling from more than 11 per cent in March to around eight per cent in April. 

On a quarterly basis, prices have risen by 1.5 per cent in the three months between February and April, showing that overall the property market remains strong and consistent, in spite of the sharp rise in March and the fall that came after. 

Martin Ellis, an economist at the Halifax, said the persistent supply and demand issue that has been in evidence throughout the UK property market for some time was one of the main problems that has pushed prices up sharply then back down in March and April.

“This situation, combined with low interest rates and rising employment and real earnings, should continue to push house prices up over the coming months," he added. 

However, the impact of the Stamp Duty levy cannot be overlooked by the market. When the chancellor announced in November that there would be a three per cent additional tax on top of the standard Stamp Duty, it was predicted that landlords would lead a rush for homes ahead of the deadline, and this proved to be the case. The end of that rush was no doubt solely responsible for the drop in prices witnessed in April.