Thu 08 Apr 2021
The average house price hit a new record high of £231,068 in February, according to Nationwide building society. Jeremy Leaf, principal of Jeremy Leaf & Co, told This is Money: ’The rebound in prices [compared with a 0.2 per cent month-on-month fall in January] doesn’t surprise me. On the ground, we have seen the pre-Christmas home-buying frenzy replaced by measured decision making in a market where supply and demand is becoming more balanced. A combination of better weather, positive Budget prospects, vaccination rollout and easing of lockdown restrictions, is adding to optimism, irrespective of the ending of the stamp duty holiday in March. As a result, I expect to see a dip in transaction numbers in the short term but in the medium term more activity, particularly as sellers are increasingly tempted to put their properties on the market, reflected in recent higher market appraisal numbers.’ He added in The Financial Times that a positive Budget, fast vaccination rollout and the easing of lockdown restrictions are ‘adding to optimism’ for the UK property market.
The Budget confirmed an extension to the stamp duty holiday and the reintroduction of low deposit government-backed mortgages to help those with small deposits onto the ladder. Jeremy Leaf told The Daily Express: ‘As always with Budgets, it is just as much what’s in it as what’s not, or emerges in the small print soon after, which counts. The biggest test is does the Budget help maintain or even improve the number of transactions and investment without adding to upwards pressure on prices? And at the same time encourage the building of more new homes, particularly affordable ones? I have to say the Chancellor probably gets ‘B’ or ‘B-minus’ on his report card as the stamp duty extension, including the tapering, is welcome but there will be another mini cliff-edge in the autumn where this latest holiday finally comes to an end.’
The extension of the stamp duty holiday announced in the Budget provided an immediate boost to the housing market. Jeremy Leaf told The Evening Standard: ‘Our offices were noticeably busier following the Budget although the pick-up in activity started a week ago as so much Budget content was leaked before the big day. Many people have been making decisions for a while now. It’s not just a kinder-than-expected Budget for buyers and the 95 per cent government-backed mortgages which are making a difference. Further rollout of the vaccine, easing of lockdown restrictions and better weather are all playing a part.'
According to Rightmove, we are experiencing the strongest sellers’ market in a decade. Jeremy Leaf told The Daily Telegraph: ‘The easing of lockdown restrictions and accelerated rollout of the vaccine are also persuading more homeowners to make properties available for sale in the traditionally busier spring market. This should bring more balance and help keep property prices in check.'
Housing prices jumped by a quarter in February, according to HMRC. Jeremy Leaf told The Daily Mail: ‘It’s always transactions rather than more volatile house prices which provide a more reliable assessment of market strength. Although mostly reflecting transactions agreed several months previously, these figures demonstrate the remarkable resilience of buyers and sellers determined to beat the stamp duty deadline. Since then, of course, the ‘holiday’ has been extended which has given many some breathing space to take advantage with confidence enhanced by acceleration of the vaccination programme and better weather.'