UK housing activity may slow down in the coming months after a tax change enhanced the market in the first quarter, though the principle momentum is one of continued price gains, Nationwide Building Society said.

The average price of a home rose 0.2 per cent to £204,368 ($296,000) in May, this matched the pace in April, the lender said on Wednesday.

A year earlier, values rose 4.7 per cent, down from 4.9 per cent in April.

A rush of investors trying to beat a tax change in April put a temporary skew on the housing market, and Nationwide said it’s difficult to measure underlying strength through the instability.

While that effect will disperse, more primary drivers such as record-low interest rates and an recovering economy may mean further increases in values in the coming months, it said.

“House purchase activity is likely to fall in the months ahead given the number of purchasers that brought forward transactions,” Nationwide Chief Economist Robert Gardner said.

Source: The Independent