Annual house price growth climbs to 7.1% in April

Annual house price growth rebounded to 7.1% during April, a level up from 5.7% in March, according to the latest Nationwide House Price Index.

April also saw house prices climb by 2.1% month-on-month, the biggest monthly rise since February 2004.

The average UK house price now stands at a new record high of £238,831 according to the data, having climbed by £15,916 over the past 12 months.

Nationwide is expecting the annual growth rate to reach double digits in June, should prices remain flat over next two months.

“Just as expectations of the end of the stamp duty holiday led to a slowdown in house price growth in March, so the extension of the stamp duty holiday in the Budget prompted a re-acceleration in April,” commented Nationwide chief economist, Robert Gardner.

“However, our research suggests that while the stamp duty holiday is impacting the timing of housing transactions, for most people it is not the key motivating factor prompting them to move in the first place.

“For example, amongst homeowners surveyed at the end of April that were either moving home or considering a move, three-quarters said this would have been the case even if the stamp duty holiday had not been extended.”

Gardner also suggested that housing market is likely to remain “fairly buoyant” over the next six months, as a result of the stamp duty extension as well as additional support for the labour market that was included in the government’s Budget.

He added: “With the stock of homes on the market relatively constrained, there is scope for annual house price growth to accelerate further in the coming months, especially given the low base for comparison in early summer last year.

“If house prices remain flat in month-on-month terms over the next two months, the annual rate of growth will reach double digits in June.”

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