House prices edge down last month as market slows
House prices inched down in February as activity slowed but remain more than five per cent up year-on-year, new data released today showed.
According to Halifax’s House Price Index, prices dropped 0.1 per cent last month compared to in January, with the average price now £251,697.
However, in the quarter from November to February prices increased 0.5 per cent, it added.
That means that compared to a year ago prices have climbed 5.2 per cent.
Compared to last year, growth has been more subdued this year. Analysts said that the market had slowed last month as potential buyers held off because they thought they had missed out on the Stamp Duty waiver.
However, Chancellor Rishi Sunak elected to extend the policy until the end of June during Wednesday’s Budget speech.
Halifax’s managing director Russell Galley said: “The housing market has been at something of a crossroads at the start of this year, with upcoming events key to determining the path of activity and prices over the next few months.
“The government’s decision to extend the stamp duty holiday – one of the main drivers of demand from home-movers during the pandemic – has removed a great deal of uncertainty for buyers with transactions yet to complete.
“The new mortgage guarantee scheme is another welcome development from this week’s Budget. Whilst mortgage approvals have reached record highs in recent months, hitting levels not seen since before the financial crisis of 2008, raising a deposit continues to be the single biggest hurdle for first-time buyers to overcome.”
However, he warned that price growth would likely slow in 2021 as a jump in unemployment could subdue consumer demand.
Nicky Stevenson, managing director at estate agent Fine & Country, said that the Stamp Duty waiver extension would see economists “tearing up” their forecasts for 2021.
“The housing market now has every possible ingredient it needs to deliver another sustained wave of highs, similar to that seen in the second half of last year”, she said.
“Pouring more fuel on the fire is the fact that the stamp duty reprieve also coincides with a time of year when the property market traditionally comes back to life.
“The good weather is returning and this will send buyers and vendors flocking back to the market. This will be even more apparent this year after so many people with school-age children put off listing their property in January and February to concentrate on the rigours of home schooling.