Average house price hits new record high as market picks up momentum in March – Halifax House Price Index

Average house price hits new record high as market picks up momentum in March, according to the latest publication of the Halifax House Price Index.

Headlines:

• On a monthly basis, house prices in March were 1.1% higher than in February
• In the latest quarter (January to March) house prices were 0.3% higher than in the preceding three months (October to December)
• House prices were 6.5% higher than in March 2020

Russell Galley, Managing Director, Halifax, said:

“Following a relatively subdued start to the year, the housing market enjoyed something of a resurgence during March, with prices up by just over 1% compared to February. This rise – the first since November last year – means the average property is now worth £254,606, a new record high.

“A year on from the early days of the first national lockdown, March’s data shows that house prices rose by 6.5% annually, or £15,430 in cash terms. Casting our minds back 12 months, few could have predicted quite how well the housing market would ride out the impact of the pandemic so far, let alone post growth of more than £1,000 per month on average.

“The continuation of government support measures has been key in boosting confidence in the housing market. The extended stamp duty holiday has put another spring in the step of home movers, whilst for those saving hard to buy their first home, the new mortgage guarantee scheme provides an alternative route onto the property ladder.

“Overall we expect elevated levels of activity to be maintained in the coming months, with consumer confidence spurred on by the successful vaccine rollout, and buyer demand still fuelled by a desire for larger properties and more outdoor space, as work-life priorities have shifted during the pandemic. A shortage of homes for sale will also support prices in the short term, as lower availability always favours sellers.

“However, with the economy yet to feel the full effect of its biggest recession in more than 300 years, we remain cautious about the longer-term outlook. Given current levels of uncertainty and the potential for higher unemployment, we still expect house price growth to slow somewhat by the end of this year.”

Key facts – Housing activity:

• HMRC monthly property transactions data for UK home sales increased in February 2021 to their highest level since March 2007. UK seasonally adjusted residential transactions in February 2021 were 147,050 – up by 23.0% from January (up 26.4% on a non-seasonally adjusted basis). The latest quarterly transactions (December-February 2021) were approximately 23.3% higher than the preceding three months (September-November 2020). Year on year, transactions were 56.2% higher than February 2020 (41.3% higher on a non-seasonally adjusted basis). (Source: HMRC, seasonally-adjusted figures)
• Mortgage approvals fell in February for the third consecutive month. The latest Bank of England figures show the number of mortgages approved to finance house purchases fell in February 2021 by 9.9% to 87,669. Year-on-year, the February figure was 19.5% above February 2020. Source: Bank of England, seasonally-adjusted figures)
• Results from the latest (March 2021) RICS Residential Market Survey show sales market activity picking up sharply over the month, with indicators on enquiries, sales and new instructions all improving noticeably compared to February. New buyer enquiries increased to a net balance of +42%, up from zero in February. New instructions also improved to a net balance of +22% compared to -28% previously, with agreed sales rising sharply to +50% from +7%. (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report)

Kindly shared by Halifax

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