Nationwide has warned that the Chancellor’s Stamp Duty reforms for first-time buyers will have only a “modest impact”.

The lender claims Philip Hammond’s Budget announcement abolishing Stamp Duty for first-time buyers for properties up to £300,000 may not have much impact across the regions due to local prices in many areas being below the previous threshold of £125,000.

It comes as the lender’s November House Price Index showed that house price growth stalled on an annual basis at 2.5%.

While Nationwide said that on an ‘adjusted’ basis there was monthly house price growth of 0.1%, this was at odds with the actual figures it quoted – last month’s average price of £209,988 was down from £211,085 in October.

Robert Gardner, chief economist at Nationwide, said: “Low mortgage rates and healthy rates of employment growth are providing support for demand, but this is being partly offset by pressure on household incomes, which appears to be weighing on confidence. The lack of homes on the market is providing support to house prices.

“The decision in the Budget to abolish Stamp Duty for first-time buyers is likely to have only a modest impact on overall demand. In many regions, first-time buyers already paid little or no stamp duty as the price of the typical first-time buyer property was below the previous threshold of £125,000.

“The potential savings are more substantial for borrowers where house prices are higher, especially in London and the south-east.

“However, as the Office for Budget Responsibility noted, some of the benefit is likely to be passed on to existing home owners through higher house prices, though the overall impact on prices is likely to be very modest.”

The lender said that ultimately more homes need to be built and said it was encouraged by an increase in office-to-residential conversions.

Gardner added: “While this is an encouraging development, we shouldn’t overstate its significance. The growth in ‘change of use’ may well slow in future years as developers have probably converted the easiest sites and the stock of suitable commercial property will reduce. The quality and long-term suitability of some of these changes of use remains to be seen.

“Therefore, while the recent data is encouraging, there is still a lot that remains to be done in tackling the UK’s housing supply issues. For this reason, the focus in the Budget on increasing supply of homes in the year ahead was encouraging.”

Commenting on the figures, Jonathan Samuels, chief executive of property lender Octane Capital, said: “Nationwide is correct to single out ‘office-to-resi’ conversions as a major factor in increased development.

“Permitted development rights are proving a lifeline for UK property. There is a huge amount of activity in this corner of the market.”