House prices expected to fall in April
UK house prices rose this month as house buyers were unphased by the pending expiration of the stamp duty holiday.
Following a 0.3% dip in January, average house prices coming to the market increased by £1,511, or 0.5%.
Although the stamp duty holiday is yet to end, buyers coming to the market now are unlikely to complete by the deadline on the last day of March.
Rightmove’s director of property data, Tim Bannister, suggested working from home is motivating people to seek more suitable properties.
“Last year the market was unexpectedly buoyed by buyers’ determination to move and satisfy their new lockdown-induced housing needs,” Bannister said.
“We may well be seeing a continuation of that this year. Rightmove’s early 2021 buyer data shows that despite the imminent end of the stamp duty incentive, all of the key buyer metrics are ahead of early 2020, itself an active period as the market was boosted by the post-election ‘Boris bounce’.”
Lockdowns also limited supply, as people decided against selling. This created upward pressure on house prices.
“As well as the current lockdown motivating buyer demand again, the restrictions have also been a factor in limiting new supply, leading to some modest upwards price pressure. These are strong signs that new buyer demand is not facing a cliff-edge after the 31st of March, said Bannister.
“It remains to be seen if this momentum will be enough to make up for the removal of the stamp duty savings that are benefitting many buyers and have been adding a sense of urgency to the whole market,” Bannister continued.
A question remains over the sustainability of this demand as the removal of stump duty comes into play. Reallymoving, the home moving company, forecasted house prices in England and Wales to fall by 4.1% in April, the month after the stamp duty holiday comes to an end.