house price growth

House prices continue to rise, with the average prices reaching a new record high of £254,606 last month. The latest data from Halifax shows a 1.1% monthly increase in average house prices in March, compared with February.

For the first quarter of the year, average house prices rose 0.3% compared with the preceding three months.

The data shows that average house prices were 6.5% higher than they were back in March 2020.

Commenting on the figures, Russell Galley, Managing Director, Halifax, said:

“Following a relatively subdued start to the year, the housing market enjoyed something of a resurgence during March, with prices up by just over 1% compared to February. This rise – the first since November last year – means the average property is now worth £254,606, a new record high.”

Galley explained that average prices were £15,430 higher in cash terms than they were a year earlier.

A rise of that magnitude seems almost unimaginable when we think back to the start of the pandemic and the concerns this prompted about rising unemployment and ultimately its impact on the property market.

Galley continued:

“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, whilst for those saving hard to buy their first home, the new mortgage guarantee scheme provides an alternative route onto the property ladder.

Looking to the future, Halifax expects elevated levels of housing market activity to be maintained in the coming months.

They believe consumer confidence will be buoyed by continued progress with the vaccination rollout programme, along with continued buyer demand for larger homes and more outdoor space.

Our changing property preferences are the result of shifting work-life priorities during the pandemic.

Another factor likely to continue to support house prices in the coming months is the shortage of homes of sale, as lower availability is a positive factor for sellers.

Galley concluded with a note of caution, saying:

“However, with the economy yet to feel the full effect of its biggest recession in more than 300 years, we remain 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.”