The latest Nationwide House price index show that UK house prices hit a record high last month. House prices in the UK rose by 2.1% in April 2021. This is the greatest monthly increase seen since February 2004. There is a new record average high for house prices, of £238,831, which is an increase of £15,916 over the last year. House price growth has rebounded year on year to 7.1% in April, up from 5.7% in March.
Robert Gardner, chief economist at Nationwide, said: “Just as expectations of the end of the Stamp Duty holiday led to a slowdown in house price growth in March, so the extension of the stamp duty holiday in the Budget prompted a reacceleration in April.
“However, our research suggests that while the stamp duty holiday is impacting the timing of housing transactions, for most people it is not the key motivating factor prompting them to move in the first place.
“For example, amongst homeowners surveyed at the end of April that were either moving home or considering a move, three quarters said this would have been the case even if the stamp duty holiday had not been extended.
“Housing market activity is likely to remain fairly buoyant over the next six months as a result of the stamp duty extension and additional support for the labour market included in the Budget, especially given continued low borrowing costs and with many people still motivated to move as a result of changing housing preferences in the wake of the pandemic.
“With the stock of homes on the market relatively constrained, there is scope for annual house price growth to accelerate further in the coming months, especially given the low base for comparison in early summer last year.”
Tomer Aboody, director of MT Finance, said: “With continuous government support and stimulus, particularly the extension of stamp duty relief, house prices shot up in April.
“Added to this the growing availability of 95% mortgages, and money being cheaper to borrow than ever, it is hard to see what is going to stop the housing market in its tracks this year.
“What the end of the stimulus will bring, we are not certain yet, but with economic uncertainty on the horizon, this artificial bubble could slowly deflate. That is the best-case scenario.
“The biggest factor is the lack of properties to buy, which is creating and overwhelming the pursuit of houses with gardens, which in turn is pushing up pricing.
“Will the government look to modify the stamp duty for downsizers in order to release more properties onto the market?
“This, along with the changing social environment with more flats being built in the centre and city of London, means a big cultural shift in society is on the horizon.”
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The latest figures released by Halifax showed the average house price in the UK had risen to a record high of £254,606. House prices in March were 1.1% higher than in February and 0.3% higher in Q1 of 2021 than Q4 of 2020.
At the close of 2020, the Nationwide house price index showed that annual house price growth in the UK had reached a 6-year high in December, of 7.3%.
