Housing Market Performs Beyond Expectations in March, Halifax Data Suggests

The run-up to the Easter home buying season has apparently put an early “spring in the step” of many movers and first-time buyers, according to the latest figures released by Halifax.

Part of the biggest high street mortgage provider in the UK, Lloyds Banking Group, Halifax, spoke of a resurgence in activity in the country’s real estate market throughout the course of March. The improved performance had been predicted by many because of the confirmed stamp duty holiday extension covering most property purchases in England, Wales, and Northern Ireland.

Growing demand for desirable properties in key areas across the UK resulted in an average house price growth of 6.5% in March, compared to the same time in 2020. This took the average UK house price to just over £264,600.

Affordability issues for first-time buyers

This reassuring increase in average property prices will undoubtedly come as welcome news to current homeowners and those planning imminent moves; however, it is likely to cause further concerns for many first-time buyers, for whom affordability may have been an issue even before the recent house price growth, particularly those who have had their income and job status affected by the COVID-19 crisis.

Likely to serve as a lifeline for many, several major high-street banks have confirmed their intent to take part in a government-backed loan scheme, which will enable them to reintroduce 95% LTV mortgages for the first time in years. This will open the door to mortgages that require only a 5% deposit, giving more first-time buyers the opportunity to get on the housing ladder.

Long-term market projections

It remains to be seen how the UK’s slow return to some form of normality affects the real estate market; nevertheless, some experts believe that a prolonged slowdown over the course of the year is largely inevitable due to the lingering effects of the COVID-19 pandemic.

“With the economy yet to feel the full effect of its biggest recession in more than 300 years, we remain cautious about the longer-term outlook,” commented Russell Galley, managing director at Halifax.

“Given current levels of uncertainty and the potential for higher unemployment, we still expect house price growth to slow somewhat by the end of this year.”

Monthly house price growth for March was recorded by the Halifax at 1.1%, suggesting that the average UK property had increased in value by just over £15,400 over the past 12 months. Performance that exceeded most expectations, given the catastrophic economic impact of three consecutive lockdowns.

“Casting our minds back 12 months, few could have predicted quite how well the housing market would ride out the impact of the pandemic so far, let alone post growth of more than £1,000 per month on average,” Mr. Galley added.