Halifax House Price Index
House Prices in March 2021
The average UK house price in March 2021 was £254,606 a rise of 1.1% from February 2021.
House prices rose by 1.1% during the last month
House price increased by 6.5% over the last year
Halifax House Price Index Chart
Halifax House Price Index Commentary
House prices reached a record high in March of £254,606 according to the latest Halifax House Price Index. Average house prices have increased by £1,285/month since the first UK lockdown, a result no one predicted as the UK economy ground to a halt one year ago. We continue to question the need for ongoing Government support for such a buoyant housing market, other sectors are in more need of assistance in our view. The outlook for the next six months looks strong as the economy unlocks, stamp duty remains on holiday and high loan to value mortgage supply increases, but there is a risk that when the extended holiday ends, the UK housing market will wake up with a hangover. .
Following the Budget on 3rd March 2021 we expect house prices to rise for the next six months as the housing market has been boosted by the double shot of the stamp duty holiday extension and the introduction of Government-backed high loan to value mortgages.
There has already been a significant increase in house hunting activity since the Budget announced the stamp duty holiday extension and high loan to value mortgage guarantee scheme. It seems that the extension has encouraged more people to start their search for a home rather than just allowing those with purchases already in progress more time to complete.
There is a real danger here that a budget policy that tried to dismantle a cliff edge will actually build a bigger one.
The Halifax cautions that the health of the UK housing market remains inextricably linked to the health of the wider UK economy and the pace and scale of its recovery is far from certain. The Halifax, therefore, expects house price growth to continue to soften.
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Halifax House Price Index Publication dates
- Monday 10th May 2021
- Monday 7th June 2021
- Wednesday 7th July 2021
- Friday 6th August 2021
- Tuesday 7th September 2021
- Thursday 7th October 2021
Halifax House Price Index methodology
Lloyds Banking Group is the sole source of data for the Halifax House Price Index. The index is based on mortgage approval data provided by Lloyds Banking Group.
In order to provide a robust measure for UK house prices the Halifax House Price Index removes or excludes several types of mortgage transaction from the index:
- Business use, capital raising, or building mortgages
- Discounted mortgages relative to market value where the property valuation is deemed to be less than 75% of the purchase price for instance in the case of many Right to Buy house purchases.
However, to better reflect the structure of the UK housing market, since 2019 the Halifax House Price Index has included shared ownership mortgages
The Halifax House Price Index is calculated by estimating the price of a fixed 'basket' of houses sold, not unlike the way the retail and consumer price indices are calculated by the Office of National Statistics (ONS).
The Halifax House Price Index uses a number of different property characteristics to determine the standardised house referred to in its house price index and average house prices. The idex takes into account the following property characteristics:
Property type: Lloyds Banking Group attributes a property type to each mortgage approval and mortgage offer: Detached, semi-detached, terraced, flat, bungalow
Property size: The Lloyds Banking Group mortgage data includes the size of each property in square metres. Typically the bigger the property the higher its price
Number of bedrooms: The number of bedrooms a residential property has impacts the price of the home as well as its overall size.
Age of home: The Halifax House Price index finds that in the main, new homes tend to attract a price premium over older homes with similar attributes. This could be due to a number of factors including improving building regulations and standards, warranties and energy efficiency. New homes are also likely to need fewer repairs and have lower maintenance costs than newer homes and this gets reflected in the relative prices of the homes.
Location: It is often said that house prices are all about 'Location, location, location' and this belief turns out to be true. The Halifax House Price index looks not only at the main nine regions within England (North East, North West, Yorkshire & Humberside, East Midlands, West Midlands, East England, South East, South West and Greater London), Scotland, Wales and Northern Ireland, but also at the house price differences between postcode districts to improve the accuracy of its house price index.
The Halifax Building Society launched its House Price Index in January 1983, which makes it the longest-running monthly house price index in the UK.