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House prices rose in March, before the Coronavirus crisis took hold

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The housing market is under virtual lockdown, and it's impossible to predict how long it will last
House prices rose in March, before the Coronavirus crisis took hold

Annual house price growth edged higher before the pandemic struck the UK, according to Nationwide.

The lender found that prices rose 0.8% in March, although it admitted that the sample period excludes recent COVID-19 related disruption.

Annual house price growth increased to 3% in March, up from 2.3% the previous month – the fastest pace since January 2018 (when annual growth was 3.2%), said Nationwide.

Robert Gardner, Nationwide’s chief economist, said: “It is important to note that, while we use a full month’s worth of data to generate the index, the cut-off point is slightly before the end of the month. This means that developments following the UK government’s lockdown will not be reflected in these figures.

“In the opening months of 2020, before the pandemic struck the UK, the housing market had been steadily gathering momentum. Activity levels and price growth were edging up thanks to continued robust labour market conditions, low borrowing costs and a more stable political backdrop following the general election.

“But housing market activity is now grinding to a halt as a result of the measures implemented to control the spread of the virus, and where the government has recommended not entering into housing transactions during this period.

“Indeed, a lack of transactions will make gauging house price trends difficult in the coming months.”

Lucy Pendleton, founder director of estate agents James Pendleton, added: “House prices have become irrelevant. That’s something no agent would ever expect to say.

“Even before an outright housing market freeze was declared, we had been forced to furlough more than half of our staff. Last week the number of sales being agreed was down 84.2% annually, exchanges were down 66.6%, the volume of offers had fallen 70% and viewings had ceased altogether.

“It wasn’t so long ago that commentators talked of Brexit uncertainty putting transactions on ice but that feels like ancient history now. Covid-19 has brought brutal new meaning to a frozen market.”

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