The rate of house price growth has slowed since March where we saw a 5.7% rise, with April seeing a rise of 4.9%, and May just 4.7%.
Nationwide Building Society suggests that this is due to the stamp duty changes that came into force in March, leading to a rush to complete transactions by this time.
The figures suggest that the cost of an average home in the UK has risen to £204,368, increasing difficulties for many first-time buyers trying to get onto the housing market. Counter-balancing this, however, are the current low borrowing costs, says Mark Posniak, Managing Director at Dragonfly Property Finance.
The rush to buy in March means that purchase activity is likely to dwindle in the coming months, says Nationwide chief economist Robert Gardner.
Alongside the stamp duty changes are the changes to reductions in tax reliefs for landlords from 2017, and the potential implications of the upcoming EU referendum in June. The EU debate has attracted differing views on the likely implications on house prices.
Robert Gardner thinks that, despite this, healthy labour market conditions and low borrowing costs are expected to underpin a steady increase in housing market activity, provided the economic recovery stays on track.
This is not legal advice; it is intended to provide information of general interest about current legal issues.