House prices in the UK edged downwards in February, but are predicted to hit record highs again after the stamp duty holiday was extended by Chancellor Rishi Sunak in this week's Budget.

The average price of a home in the UK last month was £251,697, a marginal 0.1% drop compared to January. This still represented a significant 5.2% uptick compared to February 2020, thanks to the rush of buyers that have flooded into the market since last summer when the tax holiday was initially announced. Annual house price growth has now topped 5% for seven consecutive months. However, the year-on-year growth in February did not hit the highs of more than 7% annual growth seen between September and November.

At the height of the market in November, the average house price was £252,890 according to Halifax. However, economists have been forced to tear up their forecasts for the rest of the year thanks to announcements in this week's Budget. Although the market appeared to cool in February, it is widely tipped to heat up again now that buyers will still be able to benefit from the stamp duty holiday in some form or another until the end of September. The stamp duty holiday will continue to apply to the first £500,000 of a home's purchase price until June 30, 2021. It will then taper off, applying to the first £250,000 until the end of September, before returning to £125,000 at the beginning of October.

As many as 300,000 additional home purchases are expected to now benefit by the end of June deadline, according to Rightmove, following Rishi Sunak's announcement.

About the Author: Glen Callow

Prime Accountants News Centre

Do you need to talk to us about any of the news, information or resources on our website?