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Industry reacts to Halifax House Price Index

Mortgage Introducer

April 9, 2021

Following the release of the latest house price index from Halifax today the industry has been vocal in its reaction to the figures. 

Halifax found that house prices had increased by 1.1% between February and March 2021 and are now 6.5% higher than in March 2020.

George Franks, co-founder of estate agents, Radstock Property, was one of a number of people who raised concerns about a lack of stock. However, whilst this may thwart some buyer’s homeownership aspirations it should prevent any large-scale price corrections.

He said: “The stamp duty holiday and other comprehensive government support measures have enabled the property market to stare down the pandemic, against all the odds.

“We all know that a giant fiscal squeeze and rising unemployment are on the horizon but for now the success of the vaccination roll-out, new living requirements and exceptionally low mortgage rates have lit up the market.

“Even if the property market does start to cool down later in the year, an extreme lack of stock will prevent a material fall in values. In London, rising unemployment will potentially be less of an issue than in the rest of the country, as the capital’s jobs market is an ecosystem in itself.

“Overall, we continue to expect average house prices in 2021 to rise by 2% to 4% depending on property type and location.”

Rhys Schofield, managing director of broker Peak Mortgages & Protection, again reflected on potential stock issues and the ever-looming stamp duty holiday “cliff-edge”

Schofield said: “Right now, there is a huge bottleneck in the property market, with large numbers of prospective buyers and not enough new stock, and this is really driving up house prices.

“The sheer volume of prospective buyers is partly due to the return of first-time buyers, as securing a higher loan-to-value (LTV) mortgage has got a lot easier over the past month or two.

“With the stamp duty cliff-edge looming, the lack of stock may be because next time buyers have less of an incentive to move, which frees up starter homes.

“Housebuilders also shifted the vast majority of their stock at the end of last year and have limited units available within the next six months. We’ve even had a client reserve a property through one of the bigger national housebuilders, which won’t actually be built until early 2022.”

Corey Whelan, director of independent mortgage broker Cambridgeshire Money, said that the pandemic may have created a perfect storm for the property sector.

He said: “We’ve received a phenomenal amount of enquiries in the first three months of the year.

“It’s possible a perfect storm has been cooked up by COVID-19 for those looking to move up the housing ladder.

“First-time buyers have been locked at home with parents for the past year, realising they need to break free, parents have been driven crazy by their adult children and are throwing deposit money at them to get them onto the housing ladder, while people accepting offers from first-time buyers are then taking advantage of the stamp duty holiday to reduce costs when moving house.

“For now, demand is definitely outstripping supply, which is pushing prices up, and there’s a risk this could create a bubble if unemployment starts to rise.

“Even though the stamp duty holiday is coming to an end, with 95% loan-to-value mortgages making a return I don’t expect demand to slow anytime soon.”

Meanwhile, Ashley Thomas, director of mortgage broker Magni Finance, warned of potential pressures due to increasing unemployment in the coming months.

Thomas said: “Confidence in the housing market has grown significantly in recent months.

“With the stamp duty holiday extension and lockdown restrictions easing, we have had a lot of clients wanting to go ahead and purchase a new property.

“House prices may well come under pressure if unemployment rises, but the current positivity in the market suggests that buyers are not overly concerned about this.

“Banks have eased their restrictions on loan-to-values, with a lot of lenders now offering 90% LTV products, whereas last year most banks stopped offering this.

“This is another sign that lenders are expecting the market to continue with the current upward trend.”

However, Matthew Fleming-Duffy, founder of mortgage broker Cherry Mortgage & Finance said he was confident the UK workforce would adapt.

He said: “The housing market has been absolutely hectic during the first three months of the year, with the stamp duty holiday incentivising people to put their plans into action. As the Stamp Duty holiday is phased out, there will inevitably be a slowdown in property sales but I still can’t see that resulting in a significant drop in house prices.

“Unemployment may indeed rise but I am confident that the UK workforce will adapt. It is also worth noting that Rishi Sunak has, so far, seen off the doomsayers with his economic creativity, and this should be applauded.

“Only a handful of lenders are currently offering mortgages at 95% loan-to-value, but this is likely to change as the government’s mortgage guarantee scheme results in more lenders offering these products.”

Whilst Miles Robinson, head of mortgages at online mortgage broker Trussle, warned that it may be too late for some buyers to take advantage of the stamp duty holiday extension.

He said: “Many had expected the market to slowdown in the build up to the original Stamp Duty Holiday deadline on 31 March.

“However, buyers remain motivated and prices have continued to grow by more than £1,000 per month during an extremely difficult period, with the average property now worth a record sum of £254,606.

“While the economic climate remains uncertain, the extension of the Stamp Duty holiday provides assurance to many buyers already in the process. However, our data shows it currently takes 163 days to complete on a property purchase in England.

“As a result, it will be too late for many buyers to take advantage of the full savings on offer before 31 June. Delays across the market mean that some will struggle to meet the September deadline too.

“If you’re in the homebuying process, we’d recommend factoring in the cost of stamp duty just in case your purchase doesn’t complete in time.”


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