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Strong house price growth in April, despite lockdown

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The strong growth figures reflect mortgage applications made before the UK went into lockdown
Strong house price growth in April, despite lockdown

Average UK house prices rose by 0.7% in April to reach £222,915, according to Nationwide.

The building society said this represented annual price growth of 3.7%, the strongest growth in over three years.

But it added that the full impact of the coronavirus crisis hadn’t yet filtered through to the figures.

Robert Gardner, Nationwide’s chief economist, explained: “It’s important to note that the impact of the pandemic is not fully captured in this month’s figures. This is because our index is constructed using mortgage approval data, and there is a lag between mortgage applications being submitted and approved.

“Around 80% of cases in the April sample relate to mortgage applications that commenced prior to the lockdown, and hence before the full extent of the impact of the pandemic became clear.

“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.

Andrew Montlake, managing director at the mortgage broker, Coreco, added: “Transaction volumes will naturally be down throughout the rest of the year, and prices will be under pressure, but there will always be people wanting to buy and move home.

“As devastating as the pandemic is, property is in this country’s DNA and people will return to it once lockdown measures are eased.”

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