Average house price rises to record high of £202,436 in April

House prices lifted to a new record high of £202,436 on average in April after a burst of housing market activity, an index has found.

Property values edged up by 0.2% month on month across the UK and by 4.9% annually, Nationwide Building Society said.

Estate agents had reported buy-to-let investors rushing to beat a stamp duty deadline on April 1 which saw the cost of the tax hiked by three percentage points for people buying second homes.

There have also been reports that this freed up some house-sellers to trade up, pushing up house prices higher up the property chain.

House price growth has slowed down slightly, however, compared with March, when property values increased by 0.7% month on month and by 5.7% annually.

Nationwide chief economist Robert Gardner 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 April 1 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."

Mr Gardner said that looking at recent reports showing mortgage lending and house sales data, while there is evidence that buy-to-let mortgage lending increased sharply in March, a large proportion of the boost to house purchase activity also came from cash buyers.

He continued: "Cash purchasers have become a more significant part of the market since the financial crisis, accounting for around 35% of all transactions since 2008, compared with around 25% in 2006/7.

"Cash investors would have also been better placed to buy properties in the relatively short period of time between the stamp duty announcement at the November Autumn Statement and the implementation on April 1."

Looking ahead, he said: "House purchase activity is likely to fall in the months ahead given the number of purchasers that brought forward transactions. The recovery thereafter may also be fairly gradual, especially in the BTL (buy-to-let) sector, where a wealth of other policy changes, such as the reduction in tax relief for landlords from 2017 are likely to exert an ongoing drag."

Mr Gardner also said there is a risk that the recent stampede of people snapping up properties will make existing shortages of homes on the market worse.

He said figures from the Royal Institution of Chartered Surveyors (Rics) have shown the number of properties on estate agents' books was already close to all-time lows, according to data going back to the late 1970s.

Commenting on Nationwide's report, Howard Archer, chief UK and European economist at IHS Global Insight, said: "Current increased domestic, economic and political uncertainties could also be reining in housing market activity, especially in the run-up to June's EU referendum.

"Consequently, house prices may well be softer for the next few months. Nevertheless, we still expect house prices to post relatively solid increases over 2016 as a whole - likely by around 5% on the Nationwide measure - with support coming from a relative shortage of properties as well as decent buyer interest."