British house prices dip in February

7 March, 2021 12:00 AM printer

LONDON: The average British house price dropped to £251,697 ($348,340) in February, according to the Halifax House Price Index, as the country’s mini housing boom continued to soften.

However, while house prices were 0.1 per cent down from January, the second monthly dip in a row, they were still 5.2 per cent higher than in February last year, report agencies.

Meanwhile, prices in the period from December to February were 0.5 per cent higher than in the preceding three months.

“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 compared to January,” said Russell Galley, managing director of British lender Halifax.­

“However, with annual house price inflation currently at +5.2 per cent, property values remain comfortably higher than 12 months ago, when February was the last full month before lockdown.”

Mr Galley said the housing market hit a crossroads at the start of year due to uncertainty in the market over UK finance minister Rishi Sunak’s Stamp Duty Land Tax (SDLT) holiday.

Mr Sunak first unveiled the tax break in July last year with the first £500,000 of the purchase price of a main residence in England and Northern Ireland exempt from the levy.

The move caused a surge in transactions that sent house prices soaring to an average record high of £252,000 in 2020, according to the Office for National Statistics – up 8.5 per cent from 2019.

At the start of the year, however, buyers feared Mr Sunak would stick to the existing March 30 deadline for the tax break, causing heightened activity in the market to ease.

Then in Wednesday’s budget, Mr Sunak extended the SDLT holiday in his budget statement to keep the property market buoyant as the country eases out of lockdown.

The SDLT holiday has been one of the main drivers of demand from home movers during the pandemic, with the decision to extend it removing “a great deal of uncertainty for buyers with transactions yet to complete”, said Mr Galley.

He also lauded the new mortgage guarantee scheme, unveiled in Wednesday’s budget, which helps first-time buyers on to the property ladder by encouraging lenders to provide mortgages to people with deposits as low as 5 per cent on properties worth up to £600,000.