The Nationwide Building Society has revealed that, while house prices in the UK increased by 0.2% during the month of April, the annual rate of house price growth moderated to 4.9% from 5.7% in March.
The average price of a house is now £202,435.
Robert Gardner, Nationwide’s chief economist, said: “This slowdown returns the annual pace of house price growth to the fairly narrow range between 3% and 5% that had been prevailing since the summer of 2015.
“It may be that the surge in house purchase activity resulting from the increase in stamp duty on second homes from 1 April provided a temporary boost to prices in March.
“However, it is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will tilt the demand/supply balance in favour of sellers and exert upward pressure on price growth once again in the quarters ahead.”
Mark Posniak, managing director at Dragonfly Property Finance, said: “After such a mad March, a house price hangover in April was almost inevitable. There’s a fair chance the market will now be relatively subdued in the run-up to the EU referendum.
“Demand will by no means disappear as borrowing costs are still low and in many areas of the country there is still value to be had, but a tapering off is likely.
“Whether we’re in or out of Europe could affect whether prices go up or down for some time to come.
“While supply remains tight, a weak first quarter for the economy coupled with a surprise rise in unemployment could constrain both sentiment and demand. Rising inflation and sluggish wage growth could also have an impact on price trends in the months ahead. What’s very clear is that we are entering an uncertain period for the market and economy alike.
“Where prices are going next is becoming increasingly hard to predict. What happens in the next few months could impact where the market goes in the next few years.”