Average house prices in the UK soared to a record high of £254,606 ($348,885) in March, a 1.1% jump month-on-month after a subdued start to the year.
It marked the first rise since November last year.
According to Halifax’s house price index, which tracks the prices of houses on which it offers mortgages, property values were 6.5% higher last month, or £15,430 in cash terms, compared with a year ago at the start of the coronavirus pandemic.
In the latest quarter, ending 31 March, house prices edged 0.3% higher than the preceding three months, data showed.
“Casting our minds back 12 months, few could have predicted quite how well the housing market would ride out the impact of the pandemic so far, let alone post growth of more than £1,000 per month on average,” Russell Galley, managing director at Halifax, said.
“The continuation of government support measures has been key in boosting confidence in the housing market.”
In the spring budget last month, UK chancellor Rishi Sunak extended the stamp duty holiday in England and Northern Ireland, as well as unveiling new mortgages with just 5% deposits.
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The threshold for stamp duty, a tax on property transactions in England and Northern Ireland, will remain at £500,000 until 30 June for residential purchases.
It means buyers avoid the levy altogether on purchases under that amount. It will then only fall to £250,000 for another three months, before returning to its standard £125,000 rate.
A temporary holiday introduced last year had been due to expire on 31 March.
Sunak also used his speech to flesh out prime minister Boris Johnson's pledge to help turn "generation rent into generation buy" at the Conservatives' party conference last October. The UK government will provide a mortgage guarantee to lenders on mortgages for first-time buyers if they can only offer 5% deposits.
Low-deposit mortgage availability has shrunk since the pandemic hit amid rising unemployment, increased lender caution and record high property prices, which have made home-ownership a distant prospect for many. But Johnson claimed last year the government's plans would fuel the "biggest expansion of home ownership since the 1980s."
It comes as London estate agent Chestertons saw a 57% jump in new buyers registering interest, a 30% increase in agreed sales and a 40% rise in new instructions from owners wanting to sell their home.
The company, which was established in 1805 and is one of the oldest firms of estate agents in the world, said it anticipates that it will stay busy over the summer and is due to receive a further boost with the introduction of the new mortgage guarantee scheme.
Galley added: “Overall we expect elevated levels of activity to be maintained in the coming months, with consumer confidence spurred on by the successful vaccine rollout, and buyer demand still fuelled by a desire for larger properties and more outdoor space, as work-life priorities have shifted during the pandemic
“However, with the economy yet to feel the full effect of its biggest recession in more than 300 years, we remain cautious about the longer-term outlook. Given current levels of uncertainty and the potential for higher unemployment, we still expect house price growth to slow somewhat by the end of this year.”
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