London Market Overview
As we enter spring, the average UK house price is £232,134, up 6% on March 2020. Transactions are 49% higher than last year, reflecting a surge in sales agreed in summer and the rush to beat the SDLT holiday.
House price growth in March slowed (-0.2%), indicating a softening of demand ahead of the original SDLT holiday deadline. Monthly mortgage approvals also slowed in February (-11%).
Demand spiked after the announcement of a SDLT holiday extension in England, Wales and Northern Ireland. With demand up 13% and flow of new supply down -13%, we expect upward pressure on house prices.
We are likely to see an increase in new listings, as sellers become more comfortable with viewings, as restrictions ease. Source: Dataloft, Nationwide, HMRC, Bank of England, Zoopla
87,669 mortgages were approved in February 2021, 19.5% higher than in February 2020, however, mortgage approvals have slowed, a -11% monthly decline. Gross lending was at its highest monthly figure since March 2016, £27.7 billion.
The Chancellor’s announcement of a stamp duty holiday extension and 95% mortgage guarantees caused a 24% spike in buyer demand in England and Northern Ireland. Average buyer demand since the start 2021 is 13% higher than average levels across the whole of 2020 (Zoopla).
The largest increase in demand following the budget was for three-bed houses, attracting the largest levels of demand across the country. There was also a noticeable increase in demand for one and two-bedroom flats in London and the South East, indicating increased buying intent among first-time buyers (Zoopla).