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  • On a monthly basis, house prices in April were 1.4% higher than in March
  • In the latest quarter (February to April) house prices were 0.9% higher than in the preceding three months (November to January)
  • House prices were 8.2% higher than in April 2020

Key Points

  • Average price: £258,204
  • Monthly change: +1.4%
  • Quarterly change: +0.9%
  • Annual change: +8.2%

Housing activity

HMRC monthly property transactions data for UK home sales increased in March 2021 to their highest ever level.

Mortgages for Business – MPU

UK seasonally adjusted residential transactions in March 2021 were 190,980 – up by 32.2% from February (up 49.6% on a non-seasonally adjusted basis).

The latest quarterly transactions (January-March 2021) were approximately 31.2% higher than the preceding three months (October-December 2020).

Year on year, transactions were 102.4% higher than March 2020 (107.9% higher on a non-seasonally adjusted basis). (Source: HMRC, seasonally-adjusted figures)

Mortgage approvals fell in March for the fourth consecutive month.

The latest Bank of England figures show the number of mortgages approved to finance house purchases fell in April 2021 by 5% to 82,735.

Year-on-year, the March figure was 45% above March 2020. Source: Bank of England, seasonally-adjusted figures)

Results from the latest (March 2021) RICS Residential Market Survey show sales market activity picking up sharply over the month, with indicators on enquiries, sales and new instructions all improving noticeably compared to February. New buyer enquiries increased to a net balance of +42%, up from zero in February.

New instructions also improved to a net balance of +22% compared to -28% previously, with agreed sales rising sharply to +50% from +7%. (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report)

Russell Galley, Managing Director, Halifax, said:

“House prices in April eclipsed the record high set the month before as the market continued to maintain its recent momentum.”

“The average property is now worth £258,204, up 1.4% month on month and 8.2% annually, the highest annual growth rate in 5 years. In cash terms, almost £20,000 has been added to the value of the average home since the market had essentially come to a standstill in April 2020.”

“The stamp duty holiday continues to add impetus to an extremely active market, magnifying the current shortage of available homes as buyers aim to take advantage of the Government scheme.”

“The influence of the stamp duty holiday will fade gradually over the coming months as it’s tapered out but low stock levels, low interest rates and continued demand is likely to continue to underpin prices in the market.”

“However, we do expect recent levels of activity to be sustained over the short-term as buyers continue to search for homes with more space and potentially better suited for their new working patterns.”

“Savings built up over the months in lockdown have given some buyers even more cash to invest in their dream properties, while the new mortgage guarantee scheme may have eased deposit constraints for some prospective homebuyers who previously thought their first step on the housing ladder was a few years away.”

“There is growing optimism in the long-term outlook of the UK economy as the vaccination programme continues at pace, yet we remain cautious about the medium-term prospects of the housing market.”

“As we said in March, the current levels of uncertainty and potential for higher unemployment as furlough support ends leads us to believe that house price growth will slow to the end of the year.”

Director of Benham and Reeves, Marc von Grundherr, commented:

“Rishi’s rabbit out of the hat in the form of a stamp duty holiday really has been magic where the revival of the UK property market is concerned. House prices are booming, driven by a surge of buyers keen to save while also taking advantage of the continued low rate of borrowing.”

“The question is, of course, whether this clever trick will help rejuvenate the market in the long term, once the curtain finally falls on Mr Sunak’s tax reprieve?”

Managing Director of Ascend Properties, Ged McPartlin, commented:

“Yet more mammoth rates of house price growth as the market continues to run red hot in the wake of the stamp duty holiday extension.”

“While this has certainly been the touchpaper, we’re now seeing a number of other contributing factors helping to boost market activity.”

“The lifting of lockdown restrictions and the vaccine rollout has further buoyed market sentiment, causing more buyers and sellers to enter the fray with confidence.”

“As we enter the busiest time of year for property sales, expect more of the same as transacting remains very much on the agenda for the UK.”

Managing Director of Barrows and Forrester, James Forrester, commented:

“The UK property market is currently set to warp speed, make no mistake about it.”

“We’re not just seeing a market recovering from last year’s pandemic paralysis, these current rates of house price growth are exceptional against any backdrop.”

“With the fuel tank full to the brim, it’s likely that any natural correction to this explosive rate of growth will come many, many months after the stamp duty holiday deadline and the likelihood is, this current rate of growth will remain throughout 2021.”

Matthew Cooper, Founder & Managing Director of Yes Homebuyers, commented:

“Yet further record rates of house price growth might seem like good news on the face of it, but this is far from the case.”

“The UK property market is currently buckling under the pressure of yet another Government initiative to artificially fuel demand, without as much as a thought as to addressing supply.”

“Not only this, but many sales are hanging in the balance due to a considerable market backlog which has added further uncertainty to an already archaic and unpredictable transaction process.”

“These aren’t the foundations of a strong and stable housing market and come the end of the stamp duty holiday, we can expect the gloss to come off quickly revealing what is likely to be a considerable mess.”

Nick Barnes, Chestertons’ Head of Research, says:

“April’s property market was boosted by March’s £35.6bn in mortgage lending; a record-setting level of mortgage activity that will have a snowball effect over the next few months.”

“As a result, we will continue to see strong demand from property buyers in an already competitive market.”

“Looking ahead, we expect market activity to level out slightly at the beginning of Q3 as we see the stamp duty holiday’s threshold dropping to £250,000 from 1st July.”

Guy Gittins, Chestertons’ CEO, adds:

“We are still in a market which is dominated by needs-driven, owner occupiers moving within London.”

“However, as travel restrictions start to lift over the next couple of months and the world starts opening up again, we are likely to witness more international buyers and investors returning to the market.”

“This could increase competition for available properties and put pressure on prices.”

The London property market continued its strong run in April, with Chestertons reporting 65% more buyer enquiries, 75% more sales agreed and 90% more sales completed than in April 2019.

With the first lockdown effectively closing the property market throughout April 2020, year-on-year comparisons are misleading, so Chestertons has compared figures from 2019 to give a better idea of the relative strength of the market.

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