Earlier in April, Halifax released its latest House Price Index which indicated that mortgage and property demand should continue to rise over the coming months in spite of the Covid-19 pandemic. In the wake of the news, Halifax managing director Russell Galley, Cherry Mortgage & Finance founder Matthew Fleming-Duffy, and Cambridgeshire Money’s Corey Whelan spoke to the Express about the state of the housing market and the impact that the government's Covid-19 economic measures have had, which could ultimately benefit consumers by leading to better mortgage deals.
Halifax’s House Price Index unveiled on April 9 showed that the average house hit a new record high price of £254,606, a monthly increase of over 1.1 per cent.
Compared to March 2020, it was shown that house prices had grown by 6.5 per cent over the previous 12 months, equating to £15,430 in cash terms.
Galley, Halifax
In Galley’s view, the housing market having been able to ride out the pandemic thus far and simultaneously enjoy growth, was remarkable.
Galley commented: “Following a relatively subdued start to the year, the housing market enjoyed something of a resurgence during March, with prices up by just over one percent compared to February.
"This rise, the first since November last year, means the average property is now worth £254,606, a new record high.
“A year on from the early days of the first national lockdown, March’s data shows that house prices rose by 6.5 percent annually, or £15,430 in cash terms. 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.”
Galley then proceeded to praise the government, saying that chancellor Rishi Sunak’s economic measures - such as the stamp duty holiday - were key to building confidence in the market, and that this confidence should be maintained over the coming months.
"The extended stamp duty holiday has put another spring in the step of home movers, whilst for those saving hard to buy their first home, the new mortgage guarantee scheme provides an alternative route onto the property ladder.
“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."
Fleming-Duffy, Cherry Mortgage & Finance
Fleming-Duffy went further, saying that the chancellor’s efforts should be commended.
He said: "The housing market has been absolutely hectic during the first three months of the year, with the stamp duty holiday incentivising people to put their plans into action.
"Unemployment may indeed rise but I am confident that the UK workforce will adapt. It is also worth noting that Rishi Sunak has, so far, seen off the doomsayers with his economic creativity, and this should be applauded.”
Although the end of the stamp duty holiday on June 30 is likely to see a drop off in property sales, Fleming-Duffy does not foresee any correlating fall in house prices.
He explained: "As the stamp duty holiday is phased out, there will inevitably be a slowdown in property sales, but I still can't see that resulting in a significant drop in house prices.
"Only a handful of lenders are currently offering mortgages at 95 percent loan-to-value, but this is likely to change as the government’s mortgage guarantee scheme results in more lenders offering these products."
Whelan, Cambridgeshire Money
Whelan, a director at mortgage broker Cambridgeshire Money, believes that the Covid-19 pandemic has prompted individuals to think more carefully about their options when house buying, and although demand may currently be exceeding supply, like Fleming-Duffy he does not expect the demand to slow down even when the stamp duty holiday lapses.
Whelan said: "We received a phenomenal amount of enquiries in the first three months of the year. First-time buyers have been locked at home with parents for the past year, realising they need to break free, parents have been driven crazy by their adult children and are throwing deposit money at them to get them onto the housing ladder, while people accepting offers from first-time buyers are then taking advantage of the stamp duty holiday to reduce costs when moving house.
"For now, demand is definitely outstripping supply, which is pushing prices up, and there's a risk this could create a bubble if unemployment starts to rise.
"Even though the stamp duty holiday is coming to an end, with 95 percent loan-to-value mortgages making a return I don't expect demand to slow anytime soon.”
