UK Property Market Faces Uncertainty Amid Tax Changes

British house prices remained unchanged in March following a rise in property transaction taxes, according to Nationwide. The market is expected to soften temporarily as buyers rushed to finalize deals before the tax hike. Nonetheless, Nationwide anticipates future recovery due to low unemployment and potential interest rate cuts.

In March, British house prices did not register any growth as the government increased taxes on property transactions, according to mortgage lender Nationwide. The market is projected to remain subdued because buyers had rushed transactions to sidestep additional tax costs, a trend typically seen post-stamp duty changes.

The Bank of England released data on Monday indicating a decrease in mortgage approvals in February. Additionally, the Royal Institution of Chartered Surveyors observed a deceleration in house price growth. Compared to the previous year, property prices are up by 3.9%, just shy of the expected 4.1% increase.

Despite these challenges, optimism remains. Nationwide forecasts a market comeback bolstered by low unemployment rates, increasing household earnings, and a potential interest rate cut by the Bank of England. Markets predict a two-thirds likelihood of a rate cut by May.

(With inputs from agencies.)