Despite a recent slowdown, house prices are predicted to carry on rising throughout 2021, landlords will be relieved to hear.
The latest figures from the Halifax and other expert’s forecasts indicate that house prices are set to remain steady in 2021.
Last week’s budget, with its extension to the stamp duty holiday and other measures to support mortgage borrowers, means the property market looks set for another mini-boost, at least in the short-term.
The Halifax figures showed a stalling of prices in the first two months of the year, but that was before Rishi Sunak’s budget last week when he delighted those buyers with purchases pending, taking the pressure off from completing before the 31st of March.
A buyer of a £500,000 property will save £15,000 if the sales goes through before the stamp duty concession ends.
There was a definite pause in the upward trend in prices in the second half of last year, when prices rose by an average of 5.2% in the year to the end of February.
The Office of Budget Responsibility (OBR) had predicted a fall (mini-crash), a fall off of the stamp duty holiday “cliff-edge”, of 8.3% but this was before the Chancellor announced his extension and his further measures to taper the end of the holiday.
Russell Galley, Managing Director, Halifax (pictured), says: “Having enjoyed an extremely strong period of activity in the second half of last year, the housing market continued its softer start to 2021, with average prices down very slightly (-0.1%) compared to January.
“However, with annual house price inflation currently at +5.2%, property values remain comfortably higher than 12 months ago, when February was the last full month before lockdown.
“The housing market has been at something of a crossroads at the start of this year, with upcoming events key to determining the path of activity and prices over the next few months. The government’s decision to extend the stamp duty holiday – one of the main drivers of demand from home movers during the pandemic – has removed a great deal of uncertainty for buyers with transactions yet to complete.”
Forecasts put out by Capital Economics, The OBR and Knight Frank also support the view that the budget measures have stabilised the market in the sort-term with a forecast of an 8.1% rise above a year ago, coming up to the stamp duty holiday deadline, but then easing down again gradually towards the year-end.
With buy-to-let rental property still in high demand – properties selling as soon as they come onto the market in many locations – and a move out of city centres towards urban and rural living, some properties are selling at above average prices.
It seems that property is still a relatively safe and sensible place to have your money, especially when compared to other forms of investment.