House prices are expected to fall in April
House prices in the UK rose this month as the stamp duty holiday deadline loomed as homebuyers held off on the gradual easing.
The average house price on the market rose by £1,511 (0.5%) after falling 0.3% in January.
The stamp duty holiday is not yet over, but buyers coming to the market now are unlikely to complete their transaction by the end-March deadline.
Tim Bannister, director of real estate data at Rightmove, suggested that working from home is motivating people to look for more suitable properties.
Mr Bannister said: “Last year’s market was unexpectedly buoyed by the determination of buyers to move on and meet their new housing needs due to lockdown.”
“We may see a continuation of that this year. Rightmove’s early 2021 buyer data shows that despite the impending end of the stamp duty incentive, all key buyer metrics are lower than in early 2020. The market has been buoyed by the post-election ‘Boris bounce’, which is an active period in its own right. ”
Supply was also limited as people refrained from selling due to the lockdown. This put upward pressure on housing prices.
“Not only are the current lockdowns reinvigorating buyer demand, but restrictions are also acting as a constraint on new supply, leading to some upward pressure on prices,” Bannister said. “This is a strong sign that demand is not facing a cliff beyond March 31,” he said.
“It remains to be seen whether this momentum will be enough to offset the stamp duty cuts that have benefited many buyers and put the market at risk across the board,” Bannister continued.
As the abolition of the stump tax gets underway in earnest, questions remain about the sustainability of this demand. House removal company Really Moving has predicted that house prices in England and Wales will fall by 4.1% in April, the month after the stamp duty holiday ends.
