Residential property prices in the UK fell 0.2% in April taking the price of an average home to £164,134, according to the latest housing report from the Nationwide Building Society.
It is the fourth time in five months that prices have declined and they are 0.9% lower than a year ago. They are unlikely to change much during the rest of 2012 due to weak economic conditions, according to Robert Gardner, Nationwide’s chief economist.
‘Much of the recent softness in measures of housing market activity and house prices is likely to relate to the expiry of the stamp duty holiday in late March. This provided a temporary boost to house prices in early 2012 as buyers brought forward purchases that would otherwise have taken place later in the year,’ he said.
‘This effect should fade in the months ahead, and measures such as the government’s NewBuy scheme should provide some support to buyer demand,’ he added.
But he does not expect growth this year due to the current challenging economic backdrop.
‘A significant acceleration in prices or activity is unlikely in the near term. Housing market activity is likely to remain subdued, with prices showing little growth or moving modestly lower over the next twelve months,’ he explained.
Buyers rushing to purchase before the end of the stamp duty holiday in March artificially lifted property sales and prices, according to Donna Houguez, market analyst at Quick Move Now.
‘Unfortunately we are now seeing a return to the true situation with a continuing decline in property sales, prices and mortgage lending. We expect this to add to the general anxiety surrounding the double dip recession, resulting in sustained downward pressure on the housing market,’ she explained.
‘On a positive note, it appears that the stamp duty holiday had an impact, albeit temporary, and it will be interesting to see if the government responds to these figures with any further stimulus measures,’ she added.
But Central London’s prime property market has shrugged off fears that prices would be affected by an increase in stamp duty with prices up 1.1%, according to the latest report from Knight Frank.
Both prices and applicant numbers rose in Prime Central London during April, despite the Budget announcement in March to increase stamp duty to 7% for individuals and 15% for those purchasing as non-natural persons.
Early indications of the impact of recent changes to stamp duty are that the market is so far proving resilient, said Liam Bailey, head of residential research.
‘Applicant volumes are not only stronger in April than in the same month last year but, reassuringly, they were also up 13% on last month, signalling that prospective buyers have not been deterred by the stamp duty changes. Though the number of viewings was down 7% in April compared to March this year, the figure was up on April 2011,’ said Bailey.