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Halifax’s latest data has revealed a slight drop in house prices in February. From month-to-month, house prices in February were 0.1 percent lower than in January. However, house prices were 0.5 percent higher from December to February than from September to November.
The UK property market has boomed over the last few months after Chancellor Rishi Sunak introduced the stamp duty holiday in July last year.
Compared to February 2020, house prices were 5.2 percent higher.
The latest data from Halifax reflects how the property market has been largely influenced by events such as extending the stamp duty holiday with many buyers rushing to complete before the original March 31 deadline.
Russell Galley, Managing Director, Halifax, said the housing market has continued its “softer start to 2021” with average prices dropping off slightly compared to the previous month.
He continued: “However, with annual house price inflation currently at +5.2 percent, property values remain comfortably higher than 12 months ago, when February was the last full month before lockdown.
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After the June deadline the cut off will be set at £250,000 until the end of September.
This is double the usual level of £125,000, which will continue from October.
The news came as a relief to buyers who were concerned they would miss the original deadline and be left with a hefty tax bill.
Nick Barnes, Head of Research at Chestertons, said February’s sales were driven by the stamp duty holiday deadline, with confidence being boosted by the coronavirus vaccine.
He said: “February’s sales were largely driven by buyers rushing to meet the stamp duty holiday deadline.
“Buyer confidence was further boosted by the well-organised vaccine rollout, the gradual easing of lockdown restrictions and people’s general desire to return to some form of normality.
“As a result, Chestertons saw a 78 percent increase in sales compared to the same period in 2020 and a 56 percent increase compared to January this year.”
Mr Galley said the property market will reman linked to the health of the UK economy, with the success of the vaccination roll out being a key driver.
He added: “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.”
“Many are working day and night to clear the current backlog and secure homebuyers a saving and so while delays are inconvenient, it’s the archaic selling process that is at fault and not our industry.”
Jonathan Hopper, CEO of Garrington Property Finders said the small drop in house prices could be just a “blip” due to the latest national lockdown.
“Two months of national lockdown have taken some of the heat out of a property market that during the second half of 2020 was glowing white hot.
“But there’s every chance the two-month dip will be a blip.
“At the end of February average prices were just 0.1 percent below where they were four weeks earlier, and still 0.5 percent above where they were three months previously.”
