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UK home costs unexpectedly dipped in February, as an uptick in property gross sales pushed by a stamp responsibility vacation got here to an finish, in line with mortgage lender Halifax.
In February, the common UK home worth fell 0.1 per cent from January to £298,602, Halifax stated. On an annual foundation, the common worth rose at a charge of two.9 per cent, the identical charge as January.
The worth adjustments have been under forecasts. Economists polled by Reuters had forecast 0.3 per cent month on month progress and a 3.1 per cent annual rise.
Amanda Bryden, head of mortgages at Halifax, stated the figures demonstrated a “delicate steadiness” within the UK home market.
“Whereas there’s been speak of a final minute rush on new mortgages forward of the adjustments to stamp responsibility, inevitably we’ve seen a few of the demand that was introduced ahead begin to fade because the April deadline ticks nearer, given the time wanted to finish a purchase order,” she stated.
The present stamp responsibility vacation was introduced in September 2022 when mortgage charges have been quickly rising, and stays in place till March 31.
From April, first-time consumers, for instance, will begin paying the levy on purchases of £300,000 or extra, moderately than £425,000 at current.
Friday’s figures distinction with knowledge final week from mortgage lender Nationwide, that indicated that the common home worth rose greater than anticipated in February, by a month-to-month charge of 0.4 per cent.
Halifax has a bigger pattern than Nationwide, with about 15,000 transactions in contrast with 12,000, and a give attention to northern areas that may generate short-term variations.
Nevertheless, each Nationwide and Halifax confirmed that home costs surged through the pandemic, contracted as mortgage rates rose over the previous two years, and recovered in 2024.
Ashley Webb, economist on the consultancy Capital Economics, stated that the dip in home costs proven by Halifax urged that rising mortgage charges, coupled with weak spot within the economic system as a complete, “is weighing on housing demand and costs a bit greater than we beforehand thought”.
He added that the worsening outlook within the jobs market — which some economists and companies say has been hit by the Labour authorities’s enhance of nationwide insurance coverage contributions by employers — “might imply home worth progress softens additional over the approaching months”.
Mortgage charges have been unstable over the previous yr, reflecting altering investor expectations of how a lot the Bank of England will lower borrowing prices this yr. Regardless of an uptick in current months, mortgage charges stay under their peak reached in the summertime of 2023.
Halifax reported that home costs in Northern Eire continued to rise on the quickest annual tempo within the UK, up 5.9 per cent to a median of £205,784.
London remained the costliest property market with a median property worth of £545,183, however with the slowest annual enhance at 1.6 per cent.
Affordability continues to be stretched, stated Bryden. However she added that the “scarcity of housing provide coupled with sustained demand suggests property costs will proceed to rise this yr, albeit at a extra measured tempo in comparison with final yr”.
