Increasing optimism at the success of the Coronavirus vaccine programme and the relaxation of restrictions have contributed to house prices rising 1.4 per cent in just a month according to new figures.
The annual figure for house prices is now 8.2 per cent higher than in spring 2020 as a slew of indicators suggest the economy is set to bounce back to pre-pandemic levels more rapidly than expected.
“The stamp duty holiday continues to add impetus to an extremely active market, magnifying the current shortage of available homes as buyers aim to take advantage of the government scheme” says Russell Galley, managing director at Halifax.
“The influence of the stamp duty holiday will fade gradually over the coming months as it’s tapered out but low stock levels, low interest rates and continued demand is likely to continue to underpin prices in the market.”
But he cautions: "As we said in March, the current levels of uncertainty and potential for higher unemployment as furlough support ends leads us to believe that house price growth will slow to the end of the year.”
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors, says: “These record figures reflect not just what’s been happening to the property market in the past few months but add to growing confidence over the longer term sustainability of the recovery.
“In particular, the increase in new potential buyers we have seen on the ground who have little chance of profiting from the stamp duty holiday which prompted so many earlier moves, as well as buyers using savings they have been able to accumulate during lockdown.
“Limited supply and faster vaccine rollout is driving activity and upward pressure on prices. Values may soften when tapering of the stamp duty begins and furlough ends but the pace is likely to slow rather than prices changing dramatically.”