UK tax break extension pumps up house prices

London

BRITISH house prices surged last month, mortgage lender Halifax said on Friday, a further sign that finance minister Rishi Sunak's decision to extend a property purchase tax cut has again pumped up the housing market.

Halifax said house prices rose 1.1 per cent in monthly terms during March, the biggest increase in six months, after a flat reading in February. In annual terms, prices rose 6.5 per cent, the strongest reading in four months and taking the average house price to a record high of £254,606 (S$468,966), Halifax said.

The survey chimed with data from the Royal Institution of Chartered Surveyors on Thursday, which showed a renewed housing market upturn after Mr Sunak's budget last month.

Mr Sunak extended his Covid-19 emergency cut to a property purchase tax, known as stamp duty, while Britain's economy remained under the strain of social-distancing restrictions. He also announced a new mortgage guarantee scheme for first-time buyers who cannot afford large deposits.

Halifax said it expected the upturn to persist in the next few months as consumer confidence grows on the back of Britain's swift Covid-19 vaccine rollout.

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"However, with the economy yet to feel the full effect of its biggest recession in more than 300 years, we remain cautious about the longer-term outlook," Halifax added. REUTERS