Halifax: Price growth at 5.2% – but this won’t be sustained
House price inflation slowed to 5.2% in February, down from 5.4% in January, Halifax’s House Price Index has found.
However, according to Halifax’s managing director Russell Galley, this level of growth is unlikely to be sustained throughout 2021.
Galley said: “Though there is the likelihood of an economic ‘bounceback’ from lockdown, with households not unduly impacted by the pandemic deploying the significant reserves of savings that they have built-up, higher unemployment is likely to limit new buyer demand.
“Therefore, we would not expect the level of growth seen in house prices over the past year to be sustained throughout 2021.
“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.”
On a monthly basis prices fell by 0.1% to average at £251,697, while quarterly growth stands at 0.5%.
Galley added: “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.
“The government’s decision to extend the stamp duty holiday – one of the main drivers of demand from homemovers 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.”