UK house price growth slows in April, says newly combined ONS/Land Registry data

House prices rose an annualised 8.2% in April to an average of £209,000. On the month, prices edged up 0.6%.

Prices had risen 8.5% year-on-year and 1.1% month-on-month in March as buy-to-let investors and second home buyers rushed to make purchases ahead of higher stamp duty on these properties on 1 April.

England was the main driver of house price growth, rising 9.1% year-on-year in April to an average of £225,000. In Wales house prices climbed 1.7% on the year to an average of £139,000, while Scotland saw prices increase 3.3% to £138,000.

On a regional basis in England, London continued to charge ahead with the highest average house price at £470,000, followed by South East and the East of England at £302,000 and £263,000 respectively.

“The still solid increase in house prices in April reported by the ONS came despite clear evidence that housing market activity has slowed markedly following April’s Stamp Duty increase for buy-to-let investors and second home buyers,” said Howard Archer, chief UK and European economist at IHS Global Insight.

“Current increased domestic economic and political uncertainties are also likely reining in housing market activity, especially as they have been magnified by the EU membership referendum. “

Archer said if the UK votes to remain in the European Union at the referendum next Thursday he expects housing market activity to regain “limited momentum in the latter months of 2016 as reduced uncertainty supports a pick-up in economic activity”.

He said a shortage of properties, supported by high employment and low borrowing costs should support house buyer interest and continue to prop up prices.

“On balance, we expect house prices to rise by around 5-6% over 2016.”