Average UK house prices reached a record high in April, according to new data that showed demand for moving remains strong.
Russell Galley, managing director of 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 greater London prices last month were up 0.3% from March, and 2.1% higher than a year earlier.
The mortgage lender said in the latest quarter (February to April) house prices were 0.9% higher than in the preceding three months.
Galley said 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 last year when the first lockdown was in place.
The market was able to reopen in May 2020 and later a stamp duty holiday was launched.
The sector was helped by measures in the March Budget, from an extension of the stamp duty holiday deadline, to a new mortgage guarantee scheme to help people with a 5% deposit get on the property ladder.
In addition, numerous estate agents have reported that many people have been reassessing housing requirements during Covid-19 lockdowns. For example, some buyers have sought home office space or a garden.
Halifax’s Galley said: “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.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The stamp duty holiday is still the main impetus for buyers keen to take advantage of the saving but low interest rates are set to continue long after the concession has gone. Lack of stock is pushing up prices, with demand outstripping supply. This is making it hard for first-time buyers in particular, although increased choice of 95% mortgages may help them realise their home ownership dream sooner rather than later.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Limited supply and faster vaccine rollout is driving activity and upward pressure on prices. Values may soften when tapering of the stamp duty begins and furlough ends, but the pace is likely to slow rather than prices changing dramatically.'