The Nationwide is warning that the busy start to 2016 in the housing market is driven at least partly by the rush to beat George Osborne’s stamp duty surcharge deadline of April 1 - meaning business will fall back in the spring and summer.
The lender, in commentary surrounding its latest house price index, says that number of mortgages approved for house purchase increased sharply in January to almost 75,000, up from around 71,000 approvals in December and the highest monthly number since early 2014.
However, this is largely down to buy to let and second home purchases ahead of April 1. “This is likely to have brought forward a significant number of purchases, which in turn will probably result in a fall back in approvals during the spring and summer” says Robert Gardner, Nationwide's chief economist.
Nationwide’s index shows that UK house price growth remained steady in February, with prices increasing by 0.3 per cent during the month, unchanged from January’s reading. The average house price in the UK is now £196,930.
It says annual house price growth has remained in a fairly narrow range between 3.0 per cent and 5.0 per cent since last summer
However, Gardner says that despite the likely fall back after April, improving employment prospects and continuing low interest rates should keep the market relatively strong.