Nationwide’s latest house price index revealed prices had risen by 5.7% annually in March, compared to a 6.9% increase in February with London experiencing the weakest growth of all the UK regions.
Indeed, prices in the capital increased by 4.8% compared with the North West where growth was the highest at 8.2%
Robert Gardner, Nationwide’s chief economist, explained the 0.2% month-on-month fall in prices, which compared to a 0.7% rise in February, was likely a reflection of the softening of demand ahead of the original 31 March stamp duty holiday, which was eventually extended.
He added: “Recent signs of economic resilience and the stimulus measures announced in the Budget, including the extension of the furlough scheme and the stamp duty holiday, as well as the introduction of a mortgage guarantee scheme, suggest that housing market activity is likely to remain buoyant over the next six months.
“The longer-term outlook remains highly uncertain. It may be that the recovery continues to gather momentum and that shifts in housing demand resulting from the pandemic continue to lift the market.
“However, if the labour market weakens towards the end of the year as policy support is withdrawn, as most analysts expect, then activity is likely to slow nearer the end of 2021, perhaps sharply.”
Stock levels
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said the figures reflected the market pause as many decided meeting the original stamp duty deadline at the end of March would be almost impossible, mainly due to the backlog.
He said the announcement of the holiday extension and rapid rollout of the vaccine acted like a shot in the arm and reenergised many, especially those new to the market.
He added: “This is underpinned by a shortage of available properties even though stock levels have increased lately as owner confidence to invite visitors to their homes has improved.”
Enquiries up
Guy Gittins, CEO of Chestertons, meanwhile, is predicting a busy spring and summer. The estate agency has seen a 33% jump in the number of web enquiries and a 21% increase in requests for property viewings in the first three weeks of March.
“While there is no doubt that there are a lot of people very keen to move home, many didn’t feel comfortable starting the process until they had some idea of when the country might be out of lockdown,” Gittins said.
“Once this was provided, we noticed an immediate uplift in new buyers registering with us, and the subsequent announcement confirming the extension of the stamp duty holiday only added to this.
“As the country emerges from lockdown, we expect moving home will be many people’s top priority; just as we saw after the first lockdown; and are therefore anticipating a very busy spring and summer market.
“We currently have around 70% more properties on the market for sale than we did last year. This is good news for buyers as it means that substantial price increases are relatively unlikely for the time being and that there are generally more homes to choose from.”
