The calm after the storm

Activity in the UK housing market is slowing, as reflected by a fall in the annual rate of property price growth, the latest figures show.

Fresh data from the Halifax reveals that annual home price growth in the UK eased to 9.2% in April, down from 10.1% in March, with confidence in the housing market falling to a 12-month low.

Compared with March, property prices actually fell by 0.8% in April.

The slowdown in the housing market follows a rush to beat the new stamp duty tax rates for buy -to-let and second homes which came into play on 1 April, with a record 165,400 UK homes sold in March ahead of the tax changes, which was 11% higher than the previous peak in January 2007, according to HM Revenue and Customs (HMRC).

“The much-heralded stamp duty deadline ultimately led to a stampede by buy-to-let investors and second home owners up to March. Unsurprisingly, April’s dip in house prices is the calm after the storm,” said Rob Weaver, director of investments at property crowdfunding platform Property Partner.

Various experts forecast that housing market activity slow further in the coming weeks as uncertainty around the looming EU referendum continues to grow, but should pick up after the vote due in part to the fact that demand continue to heavily outstrip supply.

“Current market conditions remain very tight as the severe imbalance between supply and demand persists,” said Martin Ellis, Halifax’s housing economist.

“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.