UK house prices dip in February with end to stamp duty holiday, Halifax says

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UK house prices unexpectedly dipped in February, as an uptick in property sales driven by a tax holiday came to an end, according to mortgage lender Halifax.

The average UK house price fell 0.1 per cent from January to £298,602, Halifax said. On an annual basis, the average price rose at a rate of 2.9 per cent, the same rate as January.

The price changes were below forecasts. Economists polled by Reuters had forecast 0.3 per cent month on month growth and a 3.1 per cent annual rise.

Amanda Bryden, head of mortgages at Halifax, said the figures demonstrated a “delicate balance” in the UK house market, noting the fading impact of a stamp duty holiday that had encouraged sales. There is now little time left to complete purchases before the tax is reimposed in April.

But she said that sustained demand and the continuing shortage of housing supply suggested that “property prices will continue to rise this year, albeit at a more measured pace compared to last year” — even though higher interest rates have hit affordability for many people.

Friday’s figures contrast with data last week from mortgage lender Nationwide, that indicated that the average house price rose more than expected in February, by a monthly rate of 0.4 per cent.

When the stamp duty holiday ends next month, first-time buyers will start paying the levy on purchases of £300,000 or more, rather than £425,000 at present.

The current stamp duty holiday was announced in September 2022 when mortgage rates were rapidly rising and remains in place until March 31.