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UK House Price Inflation Strongly Accelerates In March - Halifax

UK house price inflation accelerated sharply in March to its highest level in four months, survey data from the Lloyds Bank unit Halifax and IHS Markit showed Friday.

The house price index rose an unadjusted 6.5 percent year-on-year after a 5.2 percent increase in February.

Compared to the previous month, house prices rose 1.1 percent in March after remaining unchanged in February. The monthly increase was the first since November.

The average house price hit a record high GBP 254,606 in March.

Halifax Managing Director Russell Galley said the continuation of government support measures largely boosted confidence in the housing market.

The extended stamp duty holiday has put another spring in the step of home movers, he said.

Meanwhile, the new mortgage guarantee scheme provides an alternative route onto the property ladder to savers.

"Overall we expect elevated levels of activity to be maintained in the coming months, with consumer confidence spurred on by the successful vaccine rollout, and buyer demand still fueled by a desire for larger properties and more outdoor space, as work-life priorities have shifted during the pandemic," Galley said.

"A shortage of homes for sale will also support prices in the short term, as lower availability always favors sellers."

That said, Halifax remained cautious about the longer-term outlook as the economy is yet to feel the full effect of its biggest recession in more than 300 years.

"Given current levels of uncertainty and the potential for higher unemployment, we still expect house price growth to slow somewhat by the end of this year," Galley said.

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