HOUSE prices are still soaring but experts have warned the market to be braced for a sharp slowdown from April.

houses in London

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Prices could soon start falling, according to experts

Values across Britain jumped 9.7 per cent over the year to February to sit at a typical £209,495, according to lender Halifax.

A separate index from Nationwide found prices edged up again last month by 0.3 per cent.

The market has been boosted by a 'stampede' of landlord and second home buyers rushing to beat an additional stamp duty that takes effect from the end of March.

But after April when the three per cent added tax is in force, experts have said prices will start to dip, as affordability issues take hold.

Robert Gardner, Nationwide's chief economist, said: "The number of mortgages approved for house purchase increased sharply in January to almost 75,000, up from around 71,000 approvals in December and the highest number since January 2014.

“However, much of the increase is likely to be related to the impending increase in Stamp Duty on second homes which is due to take effect in April 2016.

"This is likely to have brought forward a significant number of purchases, which in turn will probably result in a fall back in approvals during the spring/summer."

Once a chunk of investment buyers are removed from the market, it's thought there could be a vacuum as aspiring first and second-time buyers are unable to meet the higher prices.

Jeremy Leaf, a former RICS chairman and north London estate agent, said: "Property prices are steady as the market is being underpinned by buy-to-let investors and second home owners trying to beat the stamp duty hike in April.

"We expect activity to continue to rise before it starts to let up."

Martin Ellis, Halifax housing economist, added: "Increasing affordability issues, as house price increases continue to exceed wage growth, are likely to curb housing demand and cause price growth to ease."

toy houses

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Buyers are racing to complete before April

There are already signs that the market could be starting to collapse in some parts of the country.

Central London saw values heavily inflated by an influx of foreign money after the financial crisis, which pushed prices to staggering highs.

At an average £530,409, parts of the capital are now out of reach for the majority of aspiring British homeowners - which has become a problem as overseas money is drying up.

Chinese and Russian buyers have declined in London after being hit by tougher economic conditions at home.

Since the middle of last year, house prices in Westminster and Kensington & Chelsea have already fallen by 0.3 per cent, according to Knight Frank.

And rising taxes on property investors is expected to dampen demand even further and push values lower still.

 Prices for new-build homes in the capital will fall three per cent in 2016, JLL property group has forecast.

And Morgan Stanley has predicted prices for high-end flats could crash by as much as 20 per cent, thanks to falling numbers of foreign buyers.

Just as high prices rippled out from central London after the last financial crisis, it's feared that a wave of falling values from the capital could now about to hit the rest of the market.

www.express.co.uk/