A surge in demand from consumers, even these unlikely to learn from the stamp duty vacation, offers hope for the market for the remainder of the yr.
The Nationwide says that in February, annual home value development was 6.9 per cent- up from 6.4 per cent in January.
The common value of a house now stands at £231,061 – the best ever.
Robert Gardner, Nationwide’s chief economist, explains: “House costs rose by 0.7 per cent month-on-month, after taking account of seasonal results, greater than reversing the 0.2 per cent month-to-month decline recorded in January.
“This enhance is a shock. It appeared extra possible that annual value development would soften additional forward of the top of the stamp duty vacation, which prompted many individuals contemplating a home transfer to deliver ahead their buy.
“While the stamp duty vacation will not be because of expire till the top of March, exercise and value development can be anticipated to weaken effectively earlier than that, provided that the acquisition course of sometimes takes a number of months.
“It could also be that the stamp duty vacation continues to be offering some ahead momentum, particularly given the paucity of properties on the market at current. Shifts in housing preferences may additionally be offering a extra important enhance to demand, regardless of the unsure financial outlook.
“Many peoples’ housing wants have modified as a direct results of the pandemic, with many opting to maneuver to much less densely populated places or property varieties, regardless of the sharp financial slowdown and the unsure outlook.
“As a consequence, the outlook for the housing market is unusually unsure. There is scope for shifting housing preferences to proceed to spice up exercise, particularly if there may be additional coverage assist within the Budget. Nevertheless, if labour market situations weaken as most analysts count on, it’s possible that the housing market will sluggish within the months forward.”
Jeremy Leaf, north London property agent and a former RICS residential chairman, says: “The rebound in costs would not shock me. We have seen the pre-Christmas home-buying frenzy changed by measured determination making in a market the place provide and demand is turning into extra balanced.
“A mix of higher climate, optimistic Budget prospects, vaccination rollout and easing of lockdown restrictions, is including to optimism, irresepctive of the ending of the stamp duty vacation in March.
“As a consequence, I count on to see a dip in transaction numbers within the brief time period however within the medium time period extra exercise, significantly as sellers are more and more tempted to place their properties on the market, mirrored in latest greater market appraisal numbers.”
And Nick Barnes, head of analysis at Chestertons, provides: “How the market will carry out over the subsequent few months might be largely impacted by the Chancellor’s Budget announcement and the federal government’s means to stay to the deliberate roadmap. Initiatives similar to a mortgage assure for 5 per cent deposit holders might open up the market additional and see a wave of first-time consumers taking benefit.”
