House prices in the UK went up by their highest rate in a year – at 5.7% – as buyers of second homes rushed to complete before the 1 April deadline.
The prices of a typical home also broke through the £200,000 ceiling in Nationwide’s latest House Price Index, reaching an average price of £200,251 in March, compared with £196,930 in February.
Robert Gardner, Nationwide's chief economist, puts the increased activity in the housing market down to buyers rushing to complete before the stamp duty hike on buy-to-let and second homes came into effect in April.
Mr Gardner says: “This temporary boost to demand against a backdrop of continued constrained supply is likely to have exerted upward pressure on prices and helped to lift the pace of annual price growth out of the fairly narrow range of 3% to 5% that has been prevailing since the summer.”
Commenting on the data, Rob Weaver, director of investments at property crowdfunding platform Property Partner, says: “It seems the predictions of a last-minute stampede came true.
"The rush to meet the stamp duty deadline and avoid higher purchase costs was unquestionably reflected in the March house price data.
“We may see a slight softening in activity over the next month or so, but cheap mortgages, growing wages, strong employment and the continuing issues around supply could mean average UK house prices continue to rise through 2016.”
The Land Registry House Price Index, which was also published this week, stated that houses prices in England and Wales rose by 6.1% annually taking the average price to £190,275.
Its data is based on completions, while Nationwide’s is based on mortgages lending. See London property prices soar.
Nationwide’s data highlights England’s North/South divide. While properties in the South went up by 9.9% year-on-year, the North only saw prices rises of 1.8%.
Mr Weaver adds: “The house price gap between the North and South of England has now become a gulf.”