The average price of a house in the UK stands at £204,368 due to the 0.2 per cent increase in May, which helped to cut down the annual rate from 4.9 per cent.
Demand after March has dropped substantially, having risens strongly as – in an effort to beat the stamp duty increase in April – investors in the second home and buy-to-let sectors rushed their activity.
“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 that look effect from 01 April,” said Nationwide’s chief economist, Robert Gardner.
North London estate agent and former chairman of the Royal Institution of Chartered Surveyors, Jeremy Leaf, said: “The slowdown in price growth is not as bad a comedown as one might expect following the rush from landlords and second homebuyers. The figures are also indicative of relatively strong underlying market.”
After a boom in mortgage lending in February and March, it slowed significantly in April, according to separate Bank of England data.
In March there was a £7.4bn rise in mortgage lending with 70,305 mortgage approvals being made in March. But in April lending only grew by £281m, with 66,250 approvals.