House price growth has slowed back to more normal levels in April, after the surge of activity in March caused by the introduction of the new stamp duty surcharge.
UK house prices increased by 0.2 per cent in April, with annual house price growth slowing to 4.9 per cent from 5.7 per cent the month before.
Robert Gardner, Nationwide's chief economist, said: “This slowdown returns the annual pace of house price growth to the fairly narrow range between three and five per cent 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."
Far from being the start of a more general slowing, however, Gardner pointed to several reasons for potential acceleration in house prices over the coming months.
"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," he said.
Emoov founder Russell Quirk agreed.
"This continual growth since last April wasn’t brought on by the changes to stamp duty and, although we may see a slight dip in activity over the coming month, prices are likely to carry on increasing for the foreseeable future," he said. "My bet is firmly placed that 2016 will see a very positive rise in values overall, notwithstanding the regional differences that indexes such as these always mask.”
Mark Posniak, managing director at Dragonfly Property Finance, was less certain.
"There's a fair chance the market will now be relatively subdued in the run-up to the EU referendum, he said. "Demand will by no means disappear as borrowing costs are still low and in many areas of the country there is still value to be had, but a tapering off is likely.
"While supply remains tight, a weak first quarter for the economy coupled with a surprise rise in unemployment could constrain both sentiment and demand. Rising inflation and sluggish wage growth could also have an impact on price trends in the months ahead."
"What's very clear is that we are entering an uncertain period for the market and economy alike. Where prices are going next is becoming increasingly hard to predict. What happens in the next few months could affect where the market goes in the next few years."