Property market round-up - March 2021

A slight softening in demand was expected with stamp duty relief ending on 31st March. That changed, of course, but the effect will probably not be seen for another month or two. Here are last month's numbers from Nationwide and Zoopla.

The big picture - Nationwide

Headlines -

• Prices down 0.2% month-on-month, after taking account of seasonal factors
• Policy support likely to boost housing market over the next six months, longer-term outlook remains highly uncertain
• London sees the weakest growth in all of the UK in Q1

	March 2021	February 2021
Monthly change	-0.2%	+0.7%
Annual change	+5.7%	+6.9%
Average price ​Not seasonally adjusted	£232,134	£231,068

Given that the wider economy and the labour market has performed better than expected in recent months, the slowdown in March probably reflects a softening of demand ahead of the original end of the stamp duty holiday before the Chancellor announced the extension in the Budget.

Recent signs of economic resilience and the stimulus measures announced in the Budget, including the extension of the furlough scheme and the stamp duty holiday, as well as the introduction of a mortgage guarantee scheme, suggest that housing market activity is likely to remain buoyant over the next six months.

The longer-term outlook remains highly uncertain. It may be that the recovery continues to gather momentum and that shifts in housing demand resulting from the pandemic continue to lift the market. However, if the labour market weakens towards the end of the year as policy support is withdrawn, as most analysts expect, then activity is likely to slow nearer the end of 2021, perhaps sharply.

​Robert Gardner, Chief Economist, Nationwide

City-by-city - Zoopla/Hometrack

Headlines -

• Demand spikes after Budget while new supply still lags
• Annual price growth at +4.1% in February, up from +1.8% growth a year ago
• Manchester, Liverpool, Leeds & Nottingham leading on city price growth, rising at more than 5% year on year
• Markets in North well positioned to take advantage of tapered stamp duty extension, with 70%+ of available supply priced at up to £250,000

	Average price	February 2021 ​y-o-y	February 2020 ​y-o-y
Manchester	£185,000	+6.6%	+3.5%
Liverpool	£129,800	+6.4%	+3.2%
Leeds	£178,600	+5.4%	+3.4%
Nottingham	£168,700	​+5.3%	+4.8%
Leicester		+5.0%	+3.1%

Liverpool and Manchester continue to show the strongest levels of annual house price growth at a city level, at 6.6% and 6.4% respectively, while prices in Aberdeen are down 1.3% on the year.

The Chancellor’s announcement of a stamp duty holiday tapered extension means that hundreds of thousands more buyers will benefit from some level of stamp duty reprieve.

Allowing four months for completions after agreeing sale means that most buyers now will be looking to benefit from the stamp duty holiday on the first £250,000 of their purchase, by completing by the end of September, rather than the first £500,000 which means a completion by the end of June.

​Buyers in the North are in pole position to benefit the tapered extension, with more than two-thirds of homes currently listed for sale at under £250,000 – attracting no stamp duty at all. 

As such, we expect continued upwards pressure on pricing in the North and Midlands as demand, which we had expected to be sustained even if the stamp duty holiday ended, is now further encouraged by the continued savings on offer.

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