Stamp duty responsible for demand surge, says Nationwide

The introduction of a stamp duty surcharge next month has again been deemed responsible for a boost in housing demand, with Nationwide the latest firm to report that it's had an impact on transactions.

In its latest monthly house price index, Nationwide reports that the number of house purchase mortgage approvals 'increased sharply' in January to almost 75,000.

This is up from around 71,000 approvals in December and is the highest number recorded since January 2014.

“Much of the increase is related to the impending increase in Stamp Duty on second homes which is due to take effect in April 2016,” said Robert Gardner, Nationwide's chief economist.

“This is likely to have brought forward a significant number of purchases, which in turn will probably result in a fall back in approvals during the spring/summer.” 

The bank also reported a 'slight uptick' in annual house price growth in February.

In January, average prices were 4.4% higher than the same time the previous year, a figure which increased by 0.3% to 4.8% last month.

Nationwide calculates the average house price in the UK was £196,930 during February – an increase of £101 when compared with the previous month.  

“Annual house price growth has remained in a fairly narrow range between 3% and 5% since the summer of 2015,” said Gardner.

“Looking through this volatility we expect the underlying pace of activity to increase in the quarters ahead as improving labour market conditions and low borrowing costs provide ongoing support.”