Average British house price hits new record high of £254,606

The average British house price hit a new record high of £254,606 ($348,891) in March, as the market saw a resurgence in activity after UK Finance Minister Rishi Sunak's extension of the stamp duty holiday in his annual budget . House prices in March were 1.1 per cent higher than in February, the first rise since November, the Halifax House Price Index showed, and 6.5 per cent higher than in March 2020 – the equivalent of £15,430 in cash terms. Prices were 0.3 per cent higher in the first quarter of this year compared to the preceding three-month period. Russell Galley, managing director of Halifax, said the renewed activity in March followed a subdued start to the year. “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,” Mr Galley said. “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, while for those saving hard to buy their first home, the new mortgage guarantee scheme provides an alternative route on to the property ladder.” Britain’s housing market has soared since the start of the pandemic, partly fuelled by pent-up demand following the first lockdown and later by Mr Sunak’s first tax break, unveiled in July last year, which keeps the first £500,000 of the purchase price of a main residence in England and Northern Ireland exempt from the levy. The move caused a surge in transactions that sent house prices soaring to an average record high of £252,000 in 2020 , the Office for National Statistics said – up 8.5 per cent from 2019. At the start of the year, buyers feared Mr Sunak would stick to the existing March 30 expiry date for the tax holiday, causing heightened activity in the market to ease. However, he extended the tax break in his March 3 budget until the end of June to keep the property market buoyant as the country eases out of lockdown. He also introduced a new mortgage guarantee scheme, which helps first-time buyers on to the property ladder by encouraging lenders to provide mortgages on deposits as low as 5 per cent. The Royal Institution of Chartered Surveyors said on Thursday that new buyer inquiries in March showed their highest increase since September, with demand continuing to outstrip supply, despite an increase in sellers bringing new properties to the market. The outlook for sales was the most upbeat since before the pandemic, and prices rose across all regions of the country, according to RICS. “Demand is outstripping supply,” Simon Rubinsohn, chief economist at RICS said. “Prices continue to move upwards. More worryingly, this is also being reflected in the price expectations data both at the 12-month horizon and beyond.” Tom Bill, head of residential research at global property consultancy Knight Frank, said during March and the start of April, the UK housing market was in the middle of “a perfect storm”. “Sellers who hesitated earlier in the year because they were home-schooling or had concerns about missing the stamp duty deadline are now listing their property,” Mr Bill said. “Meanwhile, the prospect of summer holidays means a spring surge in activity is more discernible this year as plans are brought forward, buoyed in many cases by high levels of personal savings accumulated over the last year.” Looking ahead, Mr Galley expects the elevated levels of activity to continue in the coming months, with consumer confidence spurred on by the successful vaccine campaign, and buyer demand still fuelled by a desire for larger properties and more outdoor space because work-life priorities shifted during the pandemic. “A shortage of homes for sale will also support prices in the short term, as lower availability always favours sellers,” he said. However, with Britain’s economy plunging 9.9 per cent last year – the biggest contraction in more than 300 years – and unemployment hitting 5 per cent in the three months ending in January, he remains 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,” Mr Galley said.

Average British house price hits new record high of £254,606

Property market picked up momentum in March after Rishi Sunak extended stamp duty holiday