House prices climb 0.1% in February – Halifax

The average UK house price saw a slight monthly drop of 0.1% in February, according to the latest Halifax House Price Index.

Halifax’s figures showed that on a quarterly basis, however, house prices were 0.5% higher in the three months from December to February, compared to the three-month period between September and November.

The index also revealed that at an average £251,697, house prices were 5.2% higher than in February last year, which was the final full month before the UK went into lockdown.

Halifax managing director, Russell Galley, said that following an “extremely strong period of activity” in the second half of last year, the housing market continued a “softer start” to 2021 in February.

“The housing market has been at something of a crossroads at the start of this year, with upcoming events key to determining the path of activity and prices over the next few months,” Galley said.

“The government’s decision to extend the stamp duty holiday – one of the main drivers of demand from home movers during the pandemic – has removed a great deal of uncertainty for buyers with transactions yet to complete.

“The new mortgage guarantee scheme is another welcome development from this week’s Budget. Whilst mortgage approvals have reached record highs in recent months, hitting levels not seen since before the financial crisis of 2008, raising a deposit continues to be the single biggest hurdle for first-time buyers to overcome.

“In the longer-term, the performance of the housing market remains inextricably linked to the health of the wider economy. The pace and extent of recovery are still highly uncertain, and much will depend on the ongoing success of the UK’s vaccination roll out.”

Commenting on the figures from Halifax, Trussle head of mortgages, Miles Robinson, suggested this week’s Budget announcements are likely to “boost buyer demand and market buoyancy”.

“The introduction of the 95%LTV mortgage guarantee scheme is positive news for those buyers with small deposits, particularly first-time buyers, who found themselves priced out of the market as a result of the pandemic,” Robinson commented.

“High LTV mortgage products all but disappeared as lenders’ tightened criteria and increased scrutiny towards borrowers. As a result of this scheme, and more buyers entering the market, we could see an inflation in house prices in the coming months.

“The return of 95% LTV mortgages, coupled with the extension of the stamp duty holiday, is likely to offer some stability to the market. Over the past year, buyer demand has trumped any coronavirus-linked uncertainty, as people look beyond lockdown and plan for the future. As a result, we could continue to see both buyer demand and house prices grow.”

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