Fall in average UK house prices in June
Annual house price growth turned negative in June for the first time in eight years, according to Nationwide.
The building society said that property prices fell by 1.4% between May and June, and by 0.1% over the last year, reaching a current average of £216,403.
Robert Gardner, Nationwide’s chief economist, said: “It is unsurprising that annual house price growth has stalled, given the magnitude of the shock to the economy as a result of the pandemic. Economic output fell by an unprecedented 25% over the course of March and April – almost four times more than during the entire financial crisis.
“Housing market activity also slowed sharply as a result of lockdown measures implemented to control the spread of the virus. While latest data from HMRC showed a slight pick-up in residential property transactions from April’s low, in May they were still 50% lower than the same month in 2019.”
Lucy Pendleton, of estate agents James Pendleton, said: “Prices are down by a whisker annually but what is remarkable is how soft a landing the market has had given the scale of the disaster that has unfolded in the past few months.
“Nationwide’s reading of the situation is totally in line with recent indications that the prices being achieved on the doorstep have slipped to 2% or 3% below asking prices on average.
“June was the first full month of trading since the property market came back to life post-lockdown and these sellers will be those highly motivated to move through necessity. That pool of vendors will shrink rapidly and that could put a floor under prices.”
Andrew Montlake, managing director at mortgage broker, Coreco, added: “The second half of 2020 is going to be the real test for the property market, as Government support for workers is slowly removed and we see a rise in unemployment.
“The Government and Treasury are going to be tested like never before as they seek to keep people in jobs, which will clearly be pivotal to the future direction of house prices.”