Halifax House Price Index - April

"The last time house prices skyrocketed as they did in April, Lance Armstrong was still a cycling hero and Arsenal were unbeaten. "While the property boom shows no signs of abating just yet, the bubble will almost certainly burst later this year when the Stamp Duty holiday comes to an end and the full economic impact of Covid and Brexit take effect. "Increasingly, we'll see a culture of improve rather than move as homeowners wise up to maximising the value of their homes to create cohesive living and working environments. "The fact remains that there is lot of demand and a lack of new property coming onto the market, be it new or second-hand. "This supply problem, which predates the pandemic, will take more to resolve than Government incentives such as Stamp Duty holidays and 5% deposit schemes if too few new homes are being built."

"Demand across all regions and buying demographics bordered on the insane in April. Prices could only go one way as a result. "You have a huge number of buyers chasing limited stock and that has resulted in every purchaser's worst nightmare, the sealed bid. "There are a number of factors contributing to the strength of the market at present. Government intervention in the form of the Stamp Duty holiday and mortgage guarantee scheme, and ridiculously low interest rates are two of the main drivers. "Throw in 25 years of consistently poor housing policy, causing a massive lack of supply, and the result is what we are witnessing today, a white hot market. "Spring is also the strongest home buying season, and the pent-up demand created over the past year means people are perhaps taking bigger property decisions than they might normally have considered. "In many cases, people are almost certainly buying at inflated prices but then this has been the case since early man first daubed something on the inside of a cave wall. I personally wouldn't bet against the property market long-term although there will naturally be dips and troughs along the way. "If this does all end in tears it will be all of us crying and not just those buying today. The UK property market has long since passed the point of being "too big to fail". There are similarities between this market and that of 2007 in terms of consumer demand and lender appetite. "The main difference now, however, is that money is being lent very sensibly and not one pound is leaving the bank vault without suffering a large degree of due diligence along the way. "As with most things in life it is the unknown unknowns that tend to sneak up and cause problems and some of these may already be festering in the system somewhere. Therefore we urge all borrowers to proceed with caution."

"There are a huge number of people looking to buy, especially in light of the Stamp Duty extension. "A lot have been looking to buy in the countryside, either as a main residence or second/holiday home. Prices seems to be increasing in all areas. "In some areas it appears there isn't enough supply, bringing back gazumping or a sealed bid process. "It will be interesting to see what will happen in the second half of the year, with the Stamp Duty relief expiring and the furlough scheme coming to an end."

"Mortgage enquiries from buyers remain incredibly high with many brokers reporting all-time record months in April. "The ongoing Stamp Duty holiday and Government mortgage guarantee scheme are both factors driving this trend. "There is a deep-seated FOMO in the market right now, a fear among buyers that they could 'miss out' if they don't hurry up and buy before prices spiral beyond reach. "As prices accelerate, it's certainly tempting to forecast it will all end in tears. However, history suggests that low interest rates, Government support and an improving economy are classic ingredients for house prices to carry on rising rather than crash. "As John Maynard Keynes famously remarked, “the markets can remain irrational longer than you can remain solvent.”