SUMMARY

House prices slipped -0.2% in March, according to Nationwide. But this fall was all in the seasonal adjustment and the unadjusted figures showed growth of 0.5%. This puts annual UK house price growth at 5.7% for March. 

The regional data showed the strongest growth over the year to Q1 2021 was in the North West at 8.0% and the West Midlands at 7.5%. The lowest growth was in London at 4.8% in the year to Q1, followed by the Outer London commuter belt at 5.6%. 

Value growth continues to be driven by high levels of demand and restricted supply. The number of sales agreed in March was likely at its highest point since before the Global Financial Crisis, and 54% above the 2017-19 average, according to TwentyCi. Numbers of new sales instructions and buyer enquiries continued to rise from their January low, according to the March RICS Survey. 

Completed transaction numbers hit record levels in February, exceeding 120,000 for the first time since HMRC records began in 2005. We expect transaction levels to remain robust throughout the stamp duty holiday extension period, anticipated to peak in June.

This high level of activity is being largely driven by mortgaged home movers, whose numbers were up 35% in January compared to last year, according to data from UK Finance. First time buyer (FTBs) mortgage numbers were up only 3%. Rising house prices and limited availability of high loan-to-value mortgages have made it harder for new buyers to jump onto the housing ladder over the last year. Prospective FTBs tend to be younger and more likely to have been impacted by unemployment and furlough during the pandemic. Some high street banks were reported this week to have rejected mortgage applications from recently furloughed applicants.

The average UK rent increased 1.4% over the year to January, according to the ONS. Rents grew the most in the South West and East Midlands, up 2.3% and 2.2% respectively, and least in London, up 0.8%.

Annual house price growth in December was once again strongest in Midlothian, at 10.2%, followed by Rossendale in Lancashire at 9.6%. House prices fell most over the same period in Ribble Valley, also in Lancashire, at -1.1%, followed by Aberdeen at -0.6%.