UK house price growth has accelerated – and it’s not all because of stamp duty changes, according to the Nationwide House Price index
Would-be second home owners appear to have bolstered the UK's house price growth in March, with the annual rate accelerating to 5.7 per cent – up from 4.8 per cent the previous month.
The price of a typical UK home rose by 0.8 per cent, at least in part as a result of buy-to-let investors getting in before the new stamp duty tax comes into play in April, the Nationwide House Price index recorded.
That means the average home is now worth more than £200,000 (it's actually £200,251), up from £196,930 in February.
Central London was the second-fastest growing region in the country, with prices rising 11.5 per cent, after the outer metropolitan area, where they grew 12.2 per cent, according to Nationwide.
But while some of this is due to a pre-tax rush, there are still other factors at play.
Read more: The UK housing market needs more homes not more taxes
Robert Gardner, Nationwide's chief economist, said: “There has been a pickup in housing market activity in recent months, with the number of housing transactions and mortgage approvals rising strongly. This is likely to have been driven, at least in part, by upcoming changes to stamp duty on second homes, where buyers have brought forward purchases in order to avoid the additional tax liabilities.
“This temporary boost to demand against a backdrop of continued constrained supply is likely to have exerted upward pressure on prices and helped to lift the pace of annual price growth out of the fairly narrow range of three-to-five per cent that has been prevailing since the summer.
“The pace of house price growth may moderate again once the stamp duty changes take effect in April. However, it is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will keep the demand/supply balance tilted in favour of sellers and maintain pressure on price growth in the quarters ahead.
“Indeed, according to Royal Institute of Chartered Surveyors, the stock of houses on estate agents’ books remains close to all time lows on data extending back 30 years."