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Derin Clark

Derin Clark

Online Reporter
Published: 31/03/2021
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Annual UK house price growth saw a slowdown in March 2021, with house prices rising 5.7% year-on-year resulting in the average house price standing at £232,134, according to the latest Nationwide House Price Index.

The figures also show that house prices fell by 0.2% month-on-month, taking into account seasonal factors, which according to Robert Gardner, chief economist at Nationwide, could be due to the original stamp duty deadline. He said: “Given that the wider economy and the labour market has performed better than expected in recent months, the slowdown in March probably reflects a softening of demand ahead of the original end of the stamp duty holiday before the Chancellor announced the extension in the Budget.”

With the extension of the stamp duty holiday to the end of June confirmed in the Chancellor’s budget earlier this month, it is expected that this will have a positive impact on housing market activity over the next six months. Beyond this, however, Gardner warns is more uncertain, he explained: “It may be that the recovery continues to gather momentum and that shifts in housing demand resulting from the pandemic continue to lift the market. However, if the labour market weakens towards the end of the year as policy support is withdrawn, as most analysts expect, then activity is likely to slow nearer the end of 2021, perhaps sharply.”

Moving-home mortgage rates remain competitive in March

While house prices have fallen month-on-month, those looking to lock into a new mortgage deal will be pleased to see that overall mortgage rates have remained competitive over the month, although there have been slight rate rises in some of the charts.

Those looking for a two year fixed mortgage at 60% loan-to-value (LTV) will have seen average rates fall slightly during March, down from 1.65% on the 1 March to 1.64% on the 31 March. Those looking to lock into a five year deal at this LTV, however, will have seen average rates increase slightly from 1.86% on the 1 March to 1.87% on the 31 March.

Meanwhile, those looking for a mortgage at 75% LTV will have seen rates fall slightly on both two and five year fixed deals. The average two year rate fell from 2.27% on the 1 March to 2.26% on the 31 March, while the average five year rate fell from 2.46% to 2.45% during this same period.

Find out more and compare the best two year fixed moving home mortgage deals.

Find out more and compare the best five year fixed moving home mortgage deals.

Competition in first-time buyer chart increases during March

At the beginning of March, the Government announced its mortgage guarantee scheme that is expected to result in more 95% LTV deals, which require a deposit of just 5%, entering the market. Already some lenders have re-entered the 95% LTV chart, while further lenders are set to enter the chart next month when the scheme is fully launched.

Find out more and compare the best 95% LTV mortgage deals.

As well as this, first-time buyers with a 10% deposit, which would require a 90% LTV mortgage, saw the number of deals available increase by 111 during March, from 323 deals available at the beginning of the month to 434 at the end.

Along with the increase in 90% LTV deals, average rates fell during the month. On the 1 March, the average two year fixed rate stood at 3.52%, which fell to 3.45% on the 31 March. Meanwhile, the average five year fixed rate fell from 3.66% to 3.65% during this same period.

Find out more and compare the best two year fixed first-time buyer mortgage deals.

Find out more and compare the best five year fixed first-time buyer mortgage deals.


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