By - On a monthly basis, house prices in February were 0.1% lower than in January
- In the latest quarter (December to February) house prices were 0.5% higher than in the preceding three months (September to November)
- House prices were 5.2% higher than in February last year
- £251,697 – Average price
- -0.1% – Monthly change
- +0.5% – Quarterly change
- +5.2% – Annual change
Housing activity
HMRC monthly property transactions data for UK home sales fell for the first time in January 2021 following eight months of positive growth.
UK seasonally adjusted residential transactions in January 2021 were 121,640 – down by 2.4% from December (down 25.2% on a non-seasonally adjusted basis).
The latest quarterly transactions (November-January 2021) were approximately 27.2% higher than the preceding three months (August-October 2020). Year on year, transactions were 22.9% higher than January 2020 (19.3% higher on a non-seasonally adjusted basis). (Source: HMRC, seasonally-adjusted figures)
Mortgage approvals fell in January for the second consecutive month.
The latest Bank of England figures show the number of mortgages approved to finance house purchases fell in January 2021 by 3.7% to 98,994. Year-on-year, the January figure was 40% above January 2020. Source: Bank of England, seasonally-adjusted figures)
Results from the latest (January 2021) RICS Residential Market Survey show market activity softening.
New buyer enquiries declined to a net balance of -28%, bringing to an end a run of seven consecutive positive monthly readings (previously +12% in December). Alongside this, there were also declines in new instructions at -38% (+4% previously) and agreed sales at -18% (+15% previously). (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report)
Russell Galley, Managing Director, Halifax, said:
“Having enjoyed an extremely strong period of activity in the second half of last year, the housing market continued its softer start to 2021, with average prices down very slightly (-0.1%) compared to January.”
“However, with annual house price inflation currently at +5.2%, property values remain comfortably higher than 12 months ago, when February was the last full month before lockdown.”
“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.”
“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.”
“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.”
Ross Counsell, chartered surveyor and director at GoodMove, on today’s Halifax House Price Index:
“According to the latest Halifax House Price Index figures, average house prices in the UK are finally beginning to fall, dropping by 0.3% in January compared to December, now standing at £251,968. This marks the biggest monthly decrease since April 2020.”
“Although small, the drop in house prices signals that the housing market is finally slowing down after a stellar year in 2020.”
“This is also shown by the annual rate of house price inflation seeing its lowest level since August, as well as the total stock held by estate agents rising to its highest level since before the EU referendum in 2016.”
“We are also approaching the end of the Stamp Duty Holiday deadline in March – something that surged the growing demand for properties and consequent high house prices during 2020.”
“On average, it can take between 12-21 weeks in the UK from offer acceptance to property completion, therefore many people looking to buy a home now are likely to understand that they won’t reap the benefits of the Stamp Duty Holiday and are holding off from buying.”
“We foresee house prices to fall even further from April onwards, so waiting until then is a wise move for buyers.”
“The future of the property market, and in fact the economy, remains uncertain throughout 2021. Increasing unemployment and a shattered economy should indicate a slow housing market, but if we have learnt anything from 2020 it’s that the housing market remains resilient.”
“Lockdown has shifted the way the nation views property, and we still expect to see ongoing demand for bigger properties in rural locations throughout this year – but at lesser prices than in 2020.”
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