House prices dip, new data reveals

Nationwide house price index
House price growth has slowed compared to last month

UK house prices are edging lower this week, perhaps suggesting an end to the housing boom.

New data from the Halifax price index showed house prices to dip 0.1% in February. This is the third monthly fall in a row and the average price is now £251,697.

The housing market has boomed over the past year as people moved to bigger homes and took advantage of the stamp duty.

Russell Galley, managing director of Halifax, said: “The housing market has been at something of a crossroads at the start of this year… 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,” he added.