House price growth stalled in March ahead of stamp duty hike – index

House price growth stalled on a month-on-month basis in March, and the market is likely to be “a little soft” now that stamp duty discounts have become less generous, according to an index.

“Nil rate” stamp duty bands have shrunk from Tuesday, meaning increased costs for some home buyers. Stamp duty applies in England and Northern Ireland.

Nationwide Building Society recorded a 0.0% month-on-month average UK house price change in March, following a 0.4% monthly increase in February.

It said the annual rate of UK house price growth remained stable in March at 3.9%, a rate which was unchanged from February.

The average UK house price in March was £271,316.

Robert Gardner, Nationwide’s chief economist, said: “These price trends are unsurprising, given the end of the stamp duty holiday at the end of March.”

He added: “Indeed, the market is likely to remain a little soft in the coming months since activity will have been brought forward to avoid the additional tax obligations – a pattern typically observed in the wake of the end of stamp duty holidays.

“Nevertheless, activity is likely to pick up steadily as the summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive.

“The unemployment rate is 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.”