"Following a relatively subdued start to the year, the housing market enjoyed something of a resurgence during March"
House prices were 6.5% higher than in March 2020 and have risen by 0.3% in the last three months compared to Q4 2020.
Russell Galley, managing director of 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.”
Tom Bill, head of residential research at Knight Frank, commented: “During March and the start of April, the UK housing market has been in the middle of a perfect storm. Sellers who hesitated earlier in the year because they were home-schooling or had concerns about missing the stamp duty deadline are now listing their property.
“Meanwhile, the prospect of summer holidays means a spring surge in activity is more discernible this year as plans are brought forward, buoyed in many cases by high levels of personal savings accumulated over the last year. Encouraging economic indicators are providing the mood music and as more people get their first or second vaccine shot, they are prompted to act. For these reasons we expect UK house prices to rise by 5% this year.”
