The lender’s latest index showed average United Kingdom prices up 0.2% in June, lifting the annual rate of growth to 5.1%.
‘Indeed, the number of residential property transactions surged to an all-time high in March, some 11% higher than the pre-crisis peak as buyers of second homes sought to avoid the additional tax liabilities, ‘ he explained. “Following the Brexit result, we think that demand will soften further, pushing down house prices by about three per cent over the next year”.
Seasonally-adjusted figures showed that prices in London rose 1.4 percent over the period, but were outpaced by rises in Northern Ireland, and areas of southeast England outside the capital.
Scotland follows after the North of England and Northern Ireland as the next cheapest region to live with prices north of the Scottish border at an average of £141,245.
“It remains unclear how long this pattern will persist, and whether the north-south divide in house price levels will continue to widen”.
On an annual basis prices rose 5.1 percent, beating expectations for a 4.9 percent rise and compared to 4.7 percent in the previous month.
Robert Gardner, Nationwide’s chief economist, said: “It will therefore be hard to assess how much of the likely fall back in transactions in the quarters ahead is because buyers brought forward purchases to avoid additional stamp duty liabilities, and how much is due to increased economic uncertainty following the referendum result”. The immediate impact is likely to be a fall in housing turnover and a rapid deceleration in house price growth as buyers adopt a wait and see the short-term impact on financial markets and the economy at large.
It is too early to assess the impact of the referendum vote on the economy, the economist noted.
“However, it is encouraging that the labour market had remained robust in recent months, with solid employment growth and the unemployment rate declining to an eleven-year low in April”.
The economist said regional disparities continued to grow.
Month on month prices edged up another 0.2 per cent, following arise by the same amount in May.
“The Outer Metropolitan region again had the strongest rate of annual price growth of 12.4% up from 12.2% in Q1”.
Despite a slowing in the second quarter, London was still the second strongest region with prices up 9.9% to a new all-time high, some 54% above pre-crisis levels and compared with 10% for overall United Kingdom house prices. Average prices in the North are now 9% below their pre-crisis peak.
But its report showed that the North/South house price gap in England had widened to a new record high of nearly £169,000 in June.
“Gauging the likely impact on house prices will be even more hard”.
Charlie Campbell, an analyst at Liberum Capital, said: “London might be more resilient than we all first thought”.