House prices holding steady as budget measures bolster buyers

AVERAGE house prices in February were 0.1 per cent lower than in January, according to the Halifax.

But looked at quarterly, prices for December to February were 0.5 per cent higher than in the preceding three months (September to November).

The UK’s average house price is now £251,697 — an increase of 5.2 per cent on February last year.

Halifax 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 homemovers 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.

“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.

“In the longer term, the performance of the housing market remains inextricably linked to the health of the wider economy. The pace and extent of recovery are still highly uncertain.

“Though there is the likelihood of an economic ‘bounceback’ from lockdown, with households not unduly impacted by the pandemic deploying the significant reserves of savings that they have built up, higher unemployment is likely to limit new buyer demand.

“Therefore we would not expect the level of growth seen in house prices over the past year to be sustained throughout 2021.”