Property market round-up - February 2021

With the Stamp Duty holiday coming to an end, January's small decline in house prices was expected to continue into the next month. Not so, as February reversed that decline and then some. The figures from Nationwide and Zoopla...

Demand for property continues to defy expectations with all of the major portals seeing bouyant activity. Rightmove report a 45% increase in site visitors over last year, with buyer enquiries up by 18% and sales agreed by 7%.

With new listings down substantially, this has translated into another uptick in prices - 0.7% according to Nationwide.

The numbers - 

The big picture - Nationwide

Headlines -

• Annual house price growth rebounded to 6.9% from 6.4% in January
• Prices up 0.7% month-on-month, more than erasing the small decline seen in January
• Average price of £231,061 highest on record

	February 2021	January 2021
Monthly change	+0.7%	-0.3%
Annual change	+6.9%	+6.4%
​Average Price ​Not seasonally adjusted	£231,068	£229,748

This increase is a surprise. It seemed more likely that annual price growth would soften further ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase.

While the stamp duty holiday is not due to expire until the end of March, activity and price growth would be expected to weaken well before that, given that the purchase process typically takes several months

The outlook for the housing market is unusually uncertain. There is scope for shifting housing preferences to continue to boost activity, especially if there is further policy support in the Budget. Nevertheless, if labour market conditions weaken as most analysts expect, it is likely that the housing market will slow in the months ahead.

Robert Gardner, Chief Economist, Nationwide

City-by-city - Zoopla/Hometrack

Headlines -

• Demand for housing remains elevated, +12.4% higher than this time last year
• Demand boosted by increased activity among first buyers who were squeezed by lack of mortgage availability last year
• Sellers remain reluctant to list homes for sale, maintaining upward pressure on prices
• Liverpool and Manchester leading on city price growth at 6.8% and 6.3%

	Average price	January 2021 Y-o-Y	January 2020 ​Y-o-Y
Liverpool	£129,300	+6.8%	+2.6%
Manchester	£184,300	+6.3%	+3.5%
Leeds	£178,100	+5.5%	+3.1%
Nottingham	£168,200	+5.4%	+4.4%
Leicester	£194,200	+5.2%	+3.9%

Robust levels of demand signals the continuation of a trend that we have highlighted since the summer last year. While stamp duty has prompted higher levels of activity, there is still a cohort of buyers and movers who are looking for a new home after a reassessment of how and where they are living after repeated lockdowns, and the rise of working from home. The data points towards a ‘search for space’ among some buyers.

The data points towards sustained buyer demand throughout Q1 as pent up activity among first time buyers is released amid a noticeable step up in availability of low deposit mortgage finance.

The ‘search for space’ among existing homeowners is set to continue, especially in light of the current sustained lockdown. Sales are still being driven by homeowners deciding that they want to live in a larger home, or a home with more outside space. Others are being motivated by the opportunity to live in a different location due to the rise in working from home. Although offices will re open when COVID 19 restrictions allow, the pendulum is unlikely to swing fully back to 5 days a week in the office for all UK office based workers.

​Zoopla/Hometrack

All content from Nationwide (full report) and Zoopla (full report)