House prices reach record high for second month in a row in April – Halifax House Price Index

House prices reach record high for second month in a row in April, according to the latest publication of the Halifax House Price Index.

Headlines:

• On a monthly basis, house prices in April were 1.4% higher than in March
• In the latest quarter (February to April) house prices were 0.9% higher than in the preceding three months (November to January)
• House prices were 8.2% higher than in April 2020

Russell Galley, Managing Director, Halifax, said:

“House prices in April eclipsed the record high set the month before as the market continued to maintain its recent momentum. The average property is now worth £258,204, up 1.4% month on month and 8.2% annually, the highest annual growth rate in 5 years. In cash terms, almost £20,000 has been added to the value of the average home since the market had essentially come to a standstill in April 2020.

“The stamp duty holiday continues to add impetus to an extremely active market, magnifying the current shortage of available homes as buyers aim to take advantage of the Government scheme. The influence of the stamp duty holiday will fade gradually over the coming months as it’s tapered out but low stock levels, low interest rates and continued demand is likely to continue to underpin prices in the market.

“However, we do expect recent levels of activity to be sustained over the short-term as buyers continue to search for homes with more space and potentially better suited for their new working patterns. Savings built up over the months in lockdown have given some buyers even more cash to invest in their dream properties, while the new mortgage guarantee scheme may have eased deposit constraints for some prospective homebuyers who previously thought their first step on the housing ladder was a few years away.

“There is growing optimism in the long-term outlook of the UK economy as the vaccination programme continues at pace, yet we remain cautious about the medium-term prospects of the housing market. As we said in March, the current levels of uncertainty and potential for higher unemployment as furlough support ends leads us to believe that house price growth will slow to the end of the year.”

Key facts – Housing activity:

• HMRC monthly property transactions data for UK home sales increased in March 2021 to their highest ever level. UK seasonally adjusted residential transactions in March 2021 were 190,980 – up by 32.2% from February (up 49.6% on a non-seasonally adjusted basis). The latest quarterly transactions (January-March 2021) were approximately 31.2% higher than the preceding three months (October[1]December 2020). Year on year, transactions were 102.4% higher than March 2020 (107.9% higher on a non-seasonally adjusted basis). (Source: HMRC, seasonally-adjusted figures)
• Mortgage approvals fell in March for the fourth consecutive month. The latest Bank of England figures show the number of mortgages approved to finance house purchases fell in April 2021 by 5% to 82,735. Year-on-year, the March figure was 45% above March 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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