House price growth slows, says Nationwide
Annual house price growth slowed in May with prices rising by 4.7% - down from 4.9% the previous month, and down from 5.7% in March.
It takes the average UK house price to £204,368, according to building society Nationwide’s latest House Price Index.
Month-on-month, house prices rose by 0.2% from April to May.
Jeremy Leaf, a former RICS chairman and north London estate agent, says today’s figures are “encouraging”.
“The latest figures from Nationwide are quite encouraging in a way because the slowdown in price growth is not as bad a comedown as one might expect following the rush from landlords and second homebuyers to beat the stamp duty hike.”
However, Robert Gardner, Nationwide's chief economist, warns that it’s still difficult to gauge the full impact of stamp duty hikes, which took place on 1 April for new buy-to-let borrowers.
He says: “In the near term, it’s going to be difficult to gauge the underlying strength of activity in the housing market due to the volatility generated by the stamp duty changes which took effect from 1 April.
“Nevertheless, healthy labour market conditions and low borrowing costs are expected to underpin a steady increase in housing market activity once stamp duty related volatility has passed, providing the economic recovery remains on track.
But Mark Posniak, managing director at Dragonfly Property Finance, adds that the EU referendum on 23 June, could also impact house prices. "What's hard to deny is that the result of the EU referendum could have a material impact on house prices in the short to medium term”, he says.
"What happens in June could determine the fate of the market for several years to come."
A hugely unpopular tax paid on property and share purchases. Stamp duty on property is levied at 1% for purchases over £125,000 (£250,000 for first-time buyers) which then moves up at a tiered rate. For property between £125k and £250k you pay 1%, then 3% from £250k up to £500k and then 4% from £500k to £1m and then 5% for properties over £1m. But unlike income tax, which is “tiered” and different rates kick in at different levels, stamp duty is a “slab” tax where you pay the rate on the whole purchase price of the property. On shares, stamp duty is charged at a flat rate of 0.5% on all share purchases. Figures correct as of May 2011.
Everything you own: all your assets (property, cars, investments, savings, insurance payouts, artwork, furniture etc) minus any liabilities (debts, current bills, payments still owed on assets like cars and houses, credit card balances and other outstanding loans). When you’re alive this is called your wealth; when you’re dead, it becomes your estate.
The catch-all term applied to investors who buy properties with the sole intention of letting them to tenants rather than living in them themselves, with the proceeds from the let usually used for the repayment of the mortgage. Buy-to-let investors have to take out specialised mortgages that carry higher interest rates and require a much bigger deposit than a standard mortgage. Other expenditure can include legal fees, income tax (on the rental profits you make), capital gains tax (if you sell the property) and “void” periods when the property is unlet.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.