Average house prices in the UK hit a new record high in March, as the residential property market gained momentum, with fresh data on Friday showing prices gaining 1.1% month-on-month.
The Halifax House Price Index showed that in the January-to-March quarter, prices were 0.3% firmer than in the three months through December, while on a year-on-year basis, the cost of a home had grown 6.5% since March 2020.
Halifax said the rise, the first since November, meant the average property was now worth £254,606, making for a new record high.
“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,” said Halifax managing director Russell Galley.
“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.
The increase in prices came after the latest RICS Residential Market Survey in March showed sales market activity picking up sharply over the month, with indicators on enquiries, sales and new instructions all improving compared to February.
New buyer enquiries increased to a net balance of 42%, up from nil in February.
There was also an improvement to new instructions, which rose to a net balance of 22% from a negative 28% previously, with agreed sales rising sharply to 50% from 7%.
“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,” Russell Galley added.
“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, Galley was remaining “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.”