House prices smashed March’s record highs during April, with the property market continuing to maintain its recent momentum.
According to Halifax’s monthly house price index, the average UK property was worth £258,204 in April, up 1.4% month-on-month and 8.2% year-on-year, the highest annual growth rate in five years.
In cash terms, almost £20,000 has been added to the value of the average home since the market essentially come to a standstill in April 2020.
Halifax said the stamp duty holiday also continued to drive activity in an already “extremely active market”, magnifying the shortage of available homes in the process.
“The influence of the stamp duty holiday will fade gradually over the coming months as it’s tapered out but low stock levels, low-interest rates and continued demand is likely to continue to underpin prices in the market,” said Halifax managing director Russell Galley.
“However, we do expect recent levels of activity to be sustained over the short-term as buyers continue to search for homes with more space and potentially better suited for their new working patterns. Savings built up over the months in lockdown have given some buyers even more cash to invest in their dream properties, while the new mortgage guarantee scheme may have eased deposit constraints for some prospective homebuyers who previously thought their first step on the housing ladder was a few years away.”
Galley added that there was “growing optimism” in the long-term outlook of the UK economy as the country’s vaccination programme continued at pace, but he added that Halifax remained 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,” he concluded.
