Annual house prices have jumped a remarkable 6.9% in the last year. Our exclusive analysis explains why values have continued to rise despite the chaos.
Feeling a bit lost with so many house price indices out there? The HomeOwners Alliance House Price Watch looks at all the information from the many indices out there to give you one easy to digest round-up of everything you need to know.
The House Price Watch looks at how prices have changed in different regions over the past month and year.
House prices continue to soar
Over the last year, house prices have jumped 6.9%, meaning the average UK home is now worth £250,341.
While you might have expected prices to tumble given the pandemic and general economic uncertainty, analysts believe that the increase in prices is down to a couple of factors.
First, the Government's decision to scrap Stamp Duty for homes under £500,000 until the end of June (after this date it will be tapered until the end of September) has convinced many to fast track their moving plans, ramping up demand.
Second, with many people expecting to work from home in the long term, they're now rethinking where they want to live and what type of home they want and are looking to move into a property that better meets their changing needs.
This has led to a massive glut of buyers scrapping over properties in the short term – property transactions hit a 14-year high in February – and this momentum is expected to continue over the next few months.
“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,” commented Halifax.
House prices across the UK
Looking at the regional breakdown over the last 12 months, the North West and Yorkshire & Humber both showed the strongest growth at 11.9% and 10.9%, respectively.
The East Midlands also saw strong house price growth over the same period at 10.6%, while the South West and North East both enjoyed a rise of 9% each.
Even the worst-performing region (London) still saw a sizeable increase in house prices at 4.6%.
How did prices in your area perform?
When we look at price moves over the last month, which admittedly is a far less reliable metric than annual data as it is more susceptible to freak fluctuations, the picture is less positive.
While house price growth appears stronger than January/February, half of the UK regions experienced a decline in house prices.
Some experts believe sellers were deterred earlier this year by lockdown restrictions, while some homebuyers have struggled with uncertainty over when the Stamp Duty holiday would end (it was extended in March).
House prices in five out of 10 regions (North West, South East, East Midlands, West Midlands and Yorkshire & Humber) rose in March/April by up to 1.3%.
The biggest monthly decline was 1.6% in the North East.
What the indices say
HomeOwners Alliance: “Transactions are at a record high this March, double the levels at this time last year.
“With the Stamp Duty holiday extension, as well as, the announcement of the new mortgage guarantee scheme, we are likely to see continued robust activity in the housing market.
“New sales listings are on the up but still lag the number of interested house hunters.
“As a result, we are likely to see rising house prices until the supply of homes for sale catches up with demand.”
Halifax: “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.”
Rightmove: “With demand being driven by the side effects of the lockdowns and the additional spur of Government incentives, we anticipate further price rises during the traditional spring selling season.”
Nationwide: “Recent signs of economic resilience and the stimulus measures announced in the Budget, including the extension of the furlough scheme and the Stamp Duty holiday, as well as the introduction of a mortgage guarantee scheme, suggest that housing market activity is likely to remain buoyant over the next six months.”
RICS: “The March 2021 RICS UK Residential Survey results show sales market activity picking up sharply over the month, with indicators on enquiries, sales and new instructions all improving noticeably compared to last time out.
“Survey participants highlight the extension of the Stamp Duty holiday as a significant driving force behind this renewed momentum, while a gradual loosening in lockdown restrictions is also said to be contributing to the rise in activity.”
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