House prices in the UK have hit a new high after rising at the fastest pace in six months in March as the chancellor extended the stamp duty holiday.
Property values rose by 1.1 per cent, according to the latest Halifax house price index. This was the biggest increase in six months and a stark improvement on the 0.1 per cent reported for February. In annual terms, property prices rose by 6.5 per cent in March, the strongest reading in four months. The average price of a home in Britain is now a record £254,606.
The figures suggest that the property market is regaining momentum after it slowed in the run-up to the original stamp duty holiday deadline of March 31. In the budget last month, Rishi Sunak, the chancellor, announced that he was extending the relief, which raises the threshold at which payments start to £500,000, by another three months. He also announced a mortgage guarantee scheme for first-time buyers.
Russell Galley, managing director at Halifax, said: “The continuation of government support measures has been key in boosting confidence. 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 on to the property ladder.”
The findings chime with a recent report by the Royal Institution of Chartered Surveyors. A net balance of 59 per cent of its agents said that prices had risen in March, with the strongest momentum in the northwest, Yorkshire and the Humber and Northern Ireland. A net balance of 42 per cent anticipate an increase in the near term. Jeremy Leaf, a former chairman at the institution, said: “The number of buyer inquiries, sales agreed and transactions were boosted by the stamp duty extension after lockdown and the conveyancing backlog prompted a market pause. Faster rollout of the vaccine too has helped to encourage more appraisals and instructions.”
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Economists expect the property market to lose momentum when the stamp duty relief is withdrawn.
