(Reuters) -British house prices were flat in March and the market is likely to stay soft after a tax increase on property transactions, mortgage lender Nationwide said on Tuesday.
A Reuters poll of economists had pointed to a 0.2% month-on-month increase.
As of Tuesday, Britain’s government has lowered the price threshold at which buyers become eligible to pay property transaction taxes – known as stamp duty.
“The market is likely to remain a little soft in the coming months since activity will have been brought forward to avoid the additional tax obligations – a pattern typically observed in the wake of the end of stamp duty holidays,” said Robert Gardner, chief economist of Nationwide.
Bank of England data on Monday showed mortgage approvals cooled in February, while the Royal Institution of Chartered Surveyors said its members reported a slowing of house price growth.
Compared with a year ago, house prices were 3.9% higher, compared with the consensus for a 4.1% annual increase.
Nationwide said it expected the market to pick up again in future months, despite rising uncertainty about the global economic outlook.
It cited a low unemployment rate, rising real household earnings, and the possibility that the Bank of England will cut interest rates again.
On Monday financial markets priced in a roughly two-thirds chance that the BoE will cut interest rates in May.
(Reporting by Andy Bruce; Editing by Kate Holton and Paul Sandle)
