House prices dipped by 0.6% month on month on average in April, according to an index – just as stamp duty discounts became less generous.
Across the UK, the annual rate of house price growth slowed to 3.4% in April, from 3.9% in March, taking the average property value in April to £270,752, Nationwide said.
Robert Gardner, the building society’s chief economist, said: “The softening in house price growth was to be expected, given the changes to stamp duty at the start of the month.
“Early indications suggest there was a significant jump in transactions in March, with buyers bringing forward their purchases to avoid additional tax obligations.”
Stamp duty discounts became less generous for some buyers in England and Northern Ireland from 1 April onwards. Scotland and Wales set different taxes on house purchases.
Gardner said: “The market is likely to remain a little soft in the coming months, following the pattern typically observed following the end of stamp duty holidays.
“Nevertheless, activity is likely to pick up steadily as summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential homebuyers in the UK remain supportive.
“Unemployment remains low, earnings are rising at a healthy pace in real terms (after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if (the Bank of England base rate) is lowered further in the coming quarters as we and most other analysts expect.”
Barclays and HSBC UK have announced more mortgages with rates below 4% this week, as part of their wider mortgage rate reductions.
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Rightmove’s mortgage expert Matt Smith said: “I think lenders are now biding their time until the 8 May (Bank of England base rate) decision, and will likely use what will hopefully be a second cut of the year as an opportunity for further reductions.”
