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.
Ross Counsell, chartered surveyor and director at GoodMove commented:
“According to the latest Halifax House Price Index figures, average house prices in the UK are on the rise again, increasing by 1.1% in March compared to February, currently standing at £254,606. Not only is this 6.5% higher than the same time last year, but average house prices are now at an all-new record high.
“Although an initial slower start to the year, it appears as though the Stamp Duty Holiday extension has resulted in yet another surge in demand for properties much like we saw in 2020. Moreover, as restrictions begin to hopefully ease over the coming months we don’t expect to see the property market slowing down anytime soon.”
“Ultimately, while the future of the property market beyond the Stamp Duty Holiday remains uncertain throughout 2021, given the extension until the end of June, we expect to see another property market boom in the first half of this year.”
Andy Sommerville, Director at Search Acumen, said: “This latest data shows that the housing market is still receptive to government stimulus measures.
“The rise in house prices over the last month can be partly attributed to improved consumer confidence in the housing market, triggered by the extension of the Stamp Duty Holiday.
Even though a large proportion of homebuyers had already rushed to complete transactions before the first Stamp Duty holiday deadline early in the year, new buyers continue to enter the market to capture the potential financial benefits on offer from the higher threshold. Tailwinds in the market are also likely being supported by consumers who have built up high levels of savings over the course of the pandemic deploying these reserves as deposits on house purchases.
Prices are likely to continue on an upward trend in April, caused by the confirmation of the Stamp Duty holiday extension and improved consumer confidence levels as a result of the success of the vaccine rollout and the reopening of the UK. However, in the medium term, the second stage of this Stamp Duty holiday will not have the same impact on house prices than the first stage.
While we are likely to see fewer transactions, the issue of the backlog of properties awaiting completion still needs to be solved. A key part of achieving this will be by providing real estate lawyers with digital tools to tap property data that is crucial to progressing transactions. By enabling them to reduce time spent on due diligence processes, lawyers will be freed up to provide value added advisory services to clients that will help them to complete transactions sooner.”
Miles Robinson, Head of Mortgages at online mortgage broker Trussle, commented:
“Many had expected the market to slowdown in the build up to the original Stamp Duty Holiday deadline on 31st 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 31st June. Delays across the market mean that some will struggle to meet the September deadline too.”
Anna Clare Harper, chief executive of asset manager SPI Capital, says:
“This annual house price growth of 6.5 per cent, despite the current, uncertain environment, reflects two broad trends.
Firstly, affordability. The temporary stamp duty reduction is having a more than proportionate impact since it gives buyers a larger deposit to work with, and they take lending on the property price, not the transaction costs. In addition, ongoing low interest rates make the cost of borrowing very low, and high savings rates over the past year have given many buyers an opportunity to increase their deposits, so that they can afford to pay more for housing.
Secondly, rising living standards. This is a long-term, global trend, and we have seen it come to the fore in the UK housing market the form of existing homeowners trading up to improve their living environment, spurred on by multiple lockdowns.
Looking to the future, the extension to the temporary stamp duty reduction is likely to continue to encourage housing transactions and price growth, though this will slow as the temporary measures ‘taper down.
The trend of rising living standards is expected to continue in the long term, though the unfortunate truth is that it is unequal within and between generations. For lower income households and younger generations, affordability constraints and preferences for flexibility will continue to boost rental demand, throughout wider uncertainties and the inevitable unemployment that comes with the difficult economic circumstances we find ourselves in.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says:
“The number of buyer enquiries, sales agreed and transactions were boosted by the stamp duty extension after lockdown and the conveyancing backlog prompted a market pause. Faster rollout of the vaccine too has helped to encourage more appraisals and instructions but not at a fast enough rate to head off further upward pressure on prices in the traditionally busier spring market. We have noticed from connected chains that demand is even stronger outside the capital in the race for more space and so many have brought forward home-buying decisions.
Looking forward, recent activity should help offset some inevitable softening in prices when the stamp duty holiday tapers, then finally ends.”
This post has originally been featured in Property Wire.