UK house prices jumped in March before the coronavirus lockdown brought the housing market to a standstill.
The average UK house price increased 2.1 per cent in the year to March, up from two per cent in February.
London house prices soared 4.7 per cent, the largest 12-month growth recorded in the capital since December 2016, according to the latest data from the Office for National Statistics.
In England house prices were up 2.2 per cent to £248,000 and increased 1.1 per cent in Wales to £162,000.
Scottish house prices increased 1.5 per cent and in Northern Ireland the average house price jumped 3. 8 per cent.
The ONS house price index is based on completed housing transactions, reflecting deals that occurred before the government imposed measures to reduce the spread of coronavirus.
The coronavirus lockdown introduced on 23 March brought the UK housing market to a standstill, with experts predicting a sharp drop in house prices this year.
However, estate agents and housebuilding firms have started to reopen as lockdown restrictions have been relaxed.
Pent-up demand
Some estate agents have reported a release of pent-up demand as restrictions have eased, resulting in a sharp uptick in enquiries.
Lucy Pendleton, property expert at estate agents James Pendleton, said: “Enquiry levels are off the chart at the moment and we are gradually bringing back more staff. Those who have already returned from being furloughed have been using words like ‘frantic’, which is a great sign.
“Only time will tell how we can convert those enquiries and how that translates into all-important prices for vendors.”
“The strong growth seen at the start of the year and annually has provided a strong foundation on which the market can bounce back and fears of a market crash should now move to the back of our minds,” Marc von Grundherr, director at Benham and Reeves, said. “Although, only time will tell, of course.”
However, other experts suggested the recovery for transaction numbers and UK house prices could be slower.
“Looking ahead, Covid-19 has re-introduced considerable uncertainty into the economy,” PwC economist Jamie Durham said.
“Although the Government has now lifted most of the restrictions on the housing market, we would expect the market, and in particular transactions, to remain subdued over the coming months.”
London to lead bounce back
“It’s significant that London was clearly powering ahead in March as the pandemic tightened its grip, with annual growth higher than at any point in the past three years,” Pendleton added.
“That tells you all you need to know about how prices should weather this storm, particularly in the capital which tends to inform what happens elsewhere in the country, albeit with a bit of a lag.”
By Jessica Clark
Source: City AM