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House prices fell 0.3% in January, as property market starts to slow

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05/02/2021
The rush to buy a home before the end of the Stamp Duty holiday is coming to an end, as it becomes less likely buyers will complete before the deadline
House prices fell 0.3% in January, as property market starts to slow

The average UK house price fell by 0.3% to £251,968 in January, according to Halifax – marking the biggest fall in prices since April 2020.

The annual rate of change was still 5.4%, said the lender, an average £13,000 higher than a year ago.

Russell Galley, managing director of Halifax, said: “There are some early signs that the upturn in the housing market could be running out of steam, with the annual rate of house price inflation cooling to its lowest level since August.

“The stamp duty holiday has undoubtedly helped to fuel growing demand amongst households for larger properties. However, given the current time to completion across the market, transactions in the early part of 2021 probably don’t include many borrowers who expect to benefit from the stamp duty reprieve.”

Adnan Shah, founder of ethical real estate investment manager Buraq London, added: “The modest falls in prices we’re seeing can be blamed on the impending end of the stamp duty holiday, and the chances of an extension are dwindling by the day.

“There have been two significant jumps in residential prices since the general election. First the Boris bounce, and then a post-COVID rally caused by pent-up demand and people rethinking their living situations.

“This isn’t a market that needs puffing up any more. The threat of valuations becoming detached from reality should concern buyers, landlords and investors alike.

“However, the vaccine rollout is proceeding better than expected, and if the engines of the economy are firing on all cylinders by the summer, the benefits could keep the housing market purring in the coming months.”

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