House prices rose by nearly £2,000 in May as the property market held firm following the rush by investors to beat April’s Stamp Duty hike.
The typical cost of a UK home increased by 0.2% during the month to stand at £204,368, according to Nationwide Building Society.
The latest figures from Nationwide are quite encouraging because the slowdown in price growth is not as bad a comedown as one might expect following the rush from landlords and second home buyers to beat the Stamp Duty hike.
Why is this happening?
The housing market was always expected to slow down following the introduction in April of the higher Stamp Duty rate for people purchasing additional property.
Transactions spiked ahead of the deadline as people brought purchases forward, leading to an anticipated lull in activity in the second quarter.
But despite the easing in demand, the shortage of properties on the market has continued to support prices.
Who does it affect
The fact that investment landlords are currently less active is good news for first-time buyers as both groups typically purchase properties at the lower end of the housing ladder.
But the drop in demand is bad news for those putting their home on the market, with anecdotal evidence suggesting some sellers have reduced their asking prices in order to make a sale.