In the bank’s latest index it reported house prices were 1.1% higher in March than in February and over the year they climbed by 6.5%.
Over the quarter to the end of March the increase was 0.3% compared to the previous three months of October to December 2020
Russell Galley, managing director at Halifax, described the increase is March as a ‘resurgence’.
“This rise – the first since November last year – means the average property is now worth £254,606, a new record high,” he said.
“A year on from the early days of the first national lockdown, March’s data shows that house prices rose by 6.5% annually, or £15,430 in cash terms.
“Casting our minds back 12 months, few could have predicted quite how well the housing market would ride out the impact of the pandemic so far, let alone post growth of more than £1,000 per month on average. “
He attributed the increase to the continued government support in the shape of the stamp duty holiday and mortgage guarantee scheme and offered a forecast of market prospects going forward.
He said: “Overall we expect elevated levels of activity to be maintained in the coming months, with consumer confidence spurred on by the successful vaccine rollout, and buyer demand still fuelled by a desire for larger properties and more outdoor space, as work-life priorities have shifted during the pandemic.
“A shortage of homes for sale will also support prices in the short term, as lower availability always favours sellers.
“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.”
Low supply of homes
Estate agents picked up on Galley’s observation about low stock. Nicky Stevenson, managing director at national estate agent group Fine & Country, said stock levels still hadn’t reached their spring peak.
“There are hordes of buyers chasing a relatively small pool of homes,” she explained.
“Demand is totally eclipsing supply and that’s forcing buyers to chase prices just as they were in September and October.
“Don’t count on rising supply moderating prices in the coming months either. That won’t necessarily be the case because there’s a raft of economic indicators all pointing to higher valuations.
“Mortgage approvals in February may have been well down on their peak last year but they’re still 30% higher than a year ago. Alongside that, consumer confidence is extremely bullish, business activity has grown strongly and, as we head into summer, plenty of homeowners will still be pining for extra space.”
