House prices increased by 1.1% between March and February taking the average price for a home in the UK to £254,606, the latest house price figures from Halifax show.
In the first quarter of 2021 (January to March) house prices were 0.3% higher than in the final quarter of 2020 (October to December) and 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.”
Tomer Aboody, director of property lender MT Finance, was also cautious warning of potential stock issues.
He said: “Another month and a year on from the first lockdown, the property market is at its strongest with further and continuous stimulus from the government, via stamp duty relief and furlough, along with other financing and assistance.
“What we are seeing is a real lack of stock which in turn increases competition and house prices. Is it time for the government to review the stamp duty at the higher level or possibly remove downsizers’ stamp duty altogether in order to improve supply and help buyers find properties?
“While money is cheap and confidence is high with the vaccine rollout, maybe a further stamp duty change higher up will help the market further.”