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Summary
- UK-based mortgage lending firm Halifax said housing prices fell for the second month in a row in February on Friday, 5 March.
- The data contrasts with the Nationwide Building Society report, which stated that home prices increased in February unexpectedly.
- Analysts said Chancellor Rishi Sunak’s recently announced budget measures would boost the sector’s near term recovery leading major housebuilding stocks such as Barratt Developments PLC, Persimmon plc and Taylor Wimpey plc to rise.
UK-based mortgage lending firm Halifax said British housing prices fell for the second month in a row in February on Friday, 5 March. The downward trend was attributed to the national lockdown related restrictions.
The February housing prices fell by 0.1 per cent, compared to a 0.4 per cent decline in January. The yearly rate of house price inflation thus stood at 5.2 per cent and is the lowest annual growth since August 2020, according to data from lender Halifax. This data contrasts sharply with the Nationwide Building Society index released earlier this week, which reported the prices had increased in February unexpectedly. An average house is now priced at approximately £251,697.
Analysts said that the recently announced budget measures by Chancellor Rishi Sunak earlier this week would help boost the sector’s recovery, leading several major house building stocks, such as Barratt Developments PLC’s (LON: BDEV), housebuilder Persimmon plc’s (LON: PSN), and FTSE 100-constituent Taylor Wimpey plc to trade in the green.
Want to know more? Do read: Property prices soar unexpectedly in Feb due to stamp duty holiday
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Halifax said the housing market’s longer-term outlook would depend on the UK’s economic recovery from the ongoing Covid crisis. While there is a demand for houses due to unspent savings, the demand would be offset by the sharp rise in unemployment.
The housing market witnessed a boom last year due to buyers boosted housing prices after the government announced tax holidays. The tax breaks were extended to June in a bid to support the housing sector.
Want to know more? Do read: Budget 2021: How the housing market can gain from recent sops
Howard Archer, chief economic adviser to economic consultants EY ITEM Club, said the boom was greater than its underlying fundamentals, and the strengthening house prices would not be sustainable.
He added that the market could witness some near-term boost because of the extension of the stamp duty till June end and partly by the end of September.
Housing stocks reaction
FTSE 100-listed homebuilder company Barratt Developments Plc’s (LON: BDEV) share prices rose by 0.33 per cent to GBX 721.40 as of 5 March at 11:53 am GMT+1. Meanwhile UK based housebuilder Persimmon Plc’s (LON: PSN) stock prices stood at GBX 2,952.00, up by 0.61 per cent.
Another FTSE 100 constituent Taylor Wimpey Plc’s (LON: TW) shares, were trading at 171.40 GBX, down by 0.64 per cent. Comparatively, the broader index FTSE 100 stood at 6,676.12, up by 0.37 per cent.
