The growth rate on the UK housing market continued to drop in May, according to data published by the Nationwide building society. Growth fell to 4.7 percent last month from 4.9 percent in April and 5.7 percent in March. Prices, meanwhile, increased on average by 0.2 percent in May, the data shows, with the average price of a house in the UK hitting GBP 204,368. Nationwide pointed out that there was a boost in sales in March as people hurried to purchase housing ahead of the changes to the stamp duty, which took effect April 1. However, the trend isnāt likely to continue.
āHouse purchase activity is likely to fall in the months ahead, given the number of purchasers that brought forward transactions,ā said Robert Gardner, chief economist at Nationwide. āThe recovery thereafter may also be fairly gradual, especially in the (buy-to-let) sector, where other policy changes, such as the reduction in tax relief for landlords from 2017, are likely to exert an ongoing drag.ā
Nationwide predicts that the UKās healthy labor market conditions and low borrowing costs will āunderpin a steady increase in housing market activity once stamp duty-related volatility has passed, providing the economic recovery remains on track,ā Gardner said.
