The annual rate of house price growth increased marginally in May to 3.5%, Nationwide’s latest house price index reveals.

The latest figures show that house prices were up 0.5% month on month.

Last month, house price growth slowed to 3.4% from 3.9% in March.

Nationwide chief economist Robert Gardner says: “Official data confirmed that there was a significant jump in residential property transactions in March, with buyers bringing forward their purchases to avoid additional stamp duty costs.”

Data found that owner occupier house purchase completions were around twice as high as usual, and represented the highest since June 2021.

However, Gardner says: “Mortgage approvals data suggests that market activity appears to be holding up well following the end of the stamp duty holiday.”

“Despite wider economic uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive.”

Commenting on the data, former RICS residential chairman Jeremy Leaf states: “The historically-accurate Nationwide house price index was one of the first to reflect the change in market dynamics since the stamp duty holiday ended in March.”

“But now it is showing that activity has settled since that time with the significant increase in supply, which now comfortably exceeds demand, keeping prices in check. Underlying confidence too has not disappeared as these latest figures evidence.”

“Buyers and sellers are coming to terms with the ‘new normal’ as employment strength outweighs economic worries and doing their best to keep deals alive.”

OnTheMarket president Jason Tebb adds: “Even though a considerable number of buyers brought forward transactions to take advantage of the stamp duty concession before it ended in March, there is still plenty of activity in the market now the incentive is no longer available.”

“Average house prices remain relatively steady although there are regional differences and an urban/rural divide exacerbated by the pandemic.”

“With the stamp duty holiday no longer available, other inducements, such as interest rate reductions, are even more essential. Four quarter-point base-rate cuts since last August have noticeably boosted buyer and seller confidence.”

“Further reductions will give added impetus to the market as we move into summer and the rest of the year.”

“Affordability pressures remain, despite rate reductions, with inflation proving stubborn and the high cost of living.”

“Lenders have been trimming mortgage rates and easing criteria in recent weeks which should help a little, giving buyers who rely on mortgages more wiggle room.”