• The Halifax House Price Index rose by 8.2% in the year to April, the highest reading for five years
• The average property is now worth £258,204
• The average home is now £20,000 more than it was in April 2020
• Lower unemployment will help the property market
Laith Khalaf, financial analyst at AJ Bell, comments:
“The house price boom is still in full swing, as white line fever is pushing buyers into the market to take advantage of the recently extended stamp duty holiday. Mortgage approvals have fallen back in recent months, which hints that some froth may be coming off the very top of the market. But we’re approaching the busy summer season, and there are plenty of tailwinds that will help to keep prices elevated moving forwards.
“The stamp duty holiday is gradually being tapered away by the end of September, but borrowing costs are still low, and the government continues to offer support in the form of Help to Buy and the Mortgage Guarantee Scheme. We also know that plenty of consumers have built up a war chest over the pandemic which can help them trade up the property market, perhaps to get some extra space for a home office.
“All this comes on top of a market where there is already a chronic shortage of housing, which creates latent buoyancy in property prices. Previously, the back end of this year had been expected to prove a stumbling block for house price growth, as job losses were forecast to rise sharply. But the Bank of England now expects unemployment to peak at 5.5%, rather than 7.75%. That’s a big swing in the forecast, which would mean a major downward pressure on house prices has been averted. For many saving to get on the housing ladder, a property crash looks like their best hope, but there’s slim chance of that at the moment.”
