Average House Prices Reach Surprise All Time High in February 2021
With the original stamp duty holiday coming to an end, it was not surprising that expectation was, that there would be a reduced level of interest in property purchases which would almost certainly trigger a slowdown in property price growth.
Or at least, this is what most had predicted, precisely why the sectors strong performance in February came as such a pleasant surprise.
Even before it was announced that the stamp duty holiday was to be extended, average house prices continued to climb in February; up an impressive 6.9% on the year before. Growth was also higher than January, where average property prices increased by approximately 6.4%.
The figures came courtesy of Nationwide’s latest monthly report, indicating that the average house price for a property in the UK in February reached a new all-time high of £231,068.
Nationwide admitted it was surprised by the sectors positive performance, having expected a marked slowdown in the run up to the March 31 stamp duty holiday deadline.
Further Growth on the Horizon
With the stamp duty holiday having now been extended until at least September, it is likely that a further spike in real estate sector activity will result in more aggressive house price growth over the coming months.
This is only likely to intensify as lockdown measures are gradually eased, making it easier and safer for buyers and sellers to conduct transactions.
The initial temporary stamp duty holiday was credited with triggering a wave of interest among prospective buyers, fuelling impressive house price growth during a time of unprecedented economic turbulence.
“It may be that the stamp duty holiday is still providing some forward momentum, especially given the paucity of properties on the market at present” said Nationwides own Robert Gardner, who commented on the data prior to the extension of the stamp duty holiday being announced by the chancellor.
“Shifts in housing preferences may also be providing a more significant boost to demand, despite the uncertain economic outlook.
“Many peoples housing needs have changed as a direct result of the pandemic, with many opting to move to less densely populated locations or property types, despite the sharp economic slowdown and the uncertain outlook.”
Meanwhile, Pantheon Macroeconomics representative Samuel Tombs admitted that his consultancy had expected a gradual decline in property prices to occur throughout the year. Having taken into account the reassuring data from January and February, he has now reconsidered his outlook for 2021.
“Our forecast for house prices to drop by about 2% this year now looks too downbeat, though we will wait for details of the guarantee scheme to be released before providing new numbers,” he said.