House prices in the three months to March were 10.1 per cent higher than in the same quarter a year earlier according to the latest figures from the Halifax - but some market analysts say the market may now have peaked.
Prices rose 2.9 per cent in the first three months of this year - much of it in March alone, reflecting the surge in activity by buy to let landlords and second home buyers to beat the stamp duty surcharge deadline.
The Halifax backs up this theory by saying that apartment prices have risen more sharply than prices for other property types since 2008, and particularly in the very recent past. The 57 per cent increase in the average price of a flat over the past eight years is significantly higher than the 37 per cent average rise for all residential properties over the same period.
"Worsening sentiment regarding the prospects for the UK economy and uncertainty ahead of the European referendum in June could result in some softening in the housing market over the next couple of months” warns Martin Ellis, Halifax housing economist.
“Current market conditions, however, remain very tight with an acute supply/demand imbalance continuing despite an improvement in the number of properties coming on to the market for sale in recent months. This, together with continuing low interest rates and a healthy labour market, indicate house price growth is set to remain robust” he suggests.
London estate agent Jeremy Leaf, a former RICS chairman, says that although the market will remain solid, we may now have seen its peak for the near future.
“Demand from landlords and second homeowners keen to complete before the April stamp duty hike has now fallen away so it will be interesting to see what April’s house price index reveals. However, we don’t expect prices to fall by as much as some predict because of the number of first-time buyers in the market taking advantage of low interest rates” he says.
“There is [also] still a general shortage of the sort of property that people want to buy. Although more property is coming onto the market, much of it is aimed at investors who understandably are more reluctant to proceed because of higher stamp duty charges.”