The average price of a UK home jumped by 1.1% in March to a record high of £254,606 as government measures to support the market continued to drive interest from buyers.
The latest monthly snapshot of the market from Halifax showed that since March 2020, house prices had risen by 6.5%, or £15,430 in cash terms. The monthly rise is the first since November.
Russell Galley, the managing director of Halifax, said the housing market had “enjoyed something of a resurgence during March”.
“Casting our minds back 12 months, few could have predicted quite how well the housing market would ride out the impact of the pandemic so far, let alone post growth of more than £1,000 per month on average.”
The figures are based on mortgages that have been approved by the lender, not completed sales.
In early March, the chancellor, Rishi Sunak, announced that he was extending a stamp duty holiday in England and Northern Ireland that had been due to finish at the end of the month, and launched a guarantee scheme to bring back 95% mortgages.
Galley said: “The continuation of government support measures has been key in boosting confidence in the housing market. The extended stamp duty holiday has put another spring in the step of home movers, while for those saving hard to buy their first home, the new mortgage guarantee scheme provides an alternative route on to the property ladder.”
Jeremy Leaf, a London estate agent and former residential chairman of the chartered surveyors’ association, RICS, said the market had been boosted by the measures.
“Faster rollout of the vaccine too has helped to encourage more appraisals and instructions but not at a fast enough rate to head off further upward pressure on prices in the traditionally busier spring market,” he said.
Lucy Pendleton from the estate agents James Pendleton said policy interventions had “heaped more demand on an already frenzied buying landscape”.
She said in London, where last week Nationwide building society said price rises were lower than in the rest of the UK, the pace of activity had “once again become frenetic ... There are plenty of properties going to sealed bids and we’ve not seen a bigger proportion go for over the asking price since before the 2008 financial crisis.”
Andrew Wishart, a property economist at the consultancy Capital Economics, said the March increase recorded by Halifax was likely to mark the start of a strong summer.
He added: “The reimposition of stamp duty and the end of the furlough scheme will eventually cool the market towards the end of the year. But continued low interest rates, good mortgage affordability, and a strong economic rebound should prevent the boom being followed by a bust.”