House Prices Fell In April As Coronavirus Restrictions Took Hold

The latest Halifax House Price Index has revealed that house prices fell in April as the coronavirus restrictions took hold.

Key points:

- House prices in April were 2.7% higher than in the same month a year earlier
- On a monthly basis, house prices in April were 0.6% lower than in March
- In the latest quarter (February to April) house prices were 0.7% higher than in the preceding three months (November to January)

- Average house price: £238,511
- Monthly change: -0.6% 
- Quarterly change: +0.7% 
- Annual change: +2.7% 

Russell Galley, Managing Director, Halifax, said: 

“The impact of measures taken to curtail the spread of coronavirus started to filter through to the housing market in April, with average prices falling by 0.6% compared to March, and the annual growth rate easing to 2.7%. “With market activity currently almost at a complete standstill, the limited number of transactions available means that calculating average house prices has inevitably become more challenging. This will lead to a great deal of volatility until more data becomes available. “It will not be until after lockdown restrictions are eased that we will get a sense of the new temporary normal conditions for the housing market. Social distancing raises new challenges for home viewings and valuations and this will require the industry to adapt to build and maintain consumer confidence. More immediately, we are likely to see some considerable movement in activity levels as buyers and sellers seek to kick-start previously agreed transactions which are likely to have stalled or been delayed. “The future remains uncertain and based on our current forecasting we expect short term headwinds to house prices, although we maintain our underlying confidence in the health of the housing market in the longer term.”

Founder and Managing Director of Sourced Capital, Stephen Moss, commented:

“Although a month on month drop is no cause for panic, it appears that the market slowdown due to the current pandemic is starting to show with the annual rate of growth also easing. 

Potential plans to relax lockdown restrictions could bring a welcome boost to the UK market but while an increase in operational activity may help to an extent, the more extensive damage will be on stock entering the market and the demand for this stock.

This impact will be fuelled more by fear than finance and it may take many months yet before buyers and sellers feel it is ‘safe’ to return to the fray. However, there remains an appetite from buyers with many still taking to the internet to window shop and once these shops reopen physically, we should see enough activity to tide things over until the end of the year.” 

Director of Benham and Reeves, Marc von Grundherr, commented:

“The UK property market is one of the cornerstones of the economy and releasing it from the shackles of the current pandemic must be a priority if we are to ensure it remains in good health. Although the damage appears minimal at present, it will take a few months before the full extent is clear in any market data. 

At present, our hands are tied and we simply don’t have the operational capacity as agents to service the industry. This must be the first focus and once we are back up and running, buyers and sellers will return in their droves as we remain a nation of aspirational homeowners.”

Founder and CEO of GetAgent.co.uk, Colby Short, commented 

“We know that the number of homes reaching the market has plummeted in the wake of the current pandemic and this, of course, has serious implications on the housing market in terms of transactional volume and prices.

However, it’s important to remember that this isn’t driven purely by apprehensive sellers as many agents are simply unable to carry out their day to day work to actually market these properties. As restrictions ease, and the financial furlough precautions many have taken are reversed, a heightened level of activity should, at least, bring some positive movement.

Yes, this may be muted to begin with, but with the market all but ground to a halt, any progress is a positive.”

Source : Insight DIY Team and Halifax

Image : jax10289 / Shutterstock.com (1184663653)

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