Property prices FALL £2,000 in a month - but values in April are still 2.7% higher than a year ago as pandemic data filters through
05-07-2020
- House prices in April were 2.7% higher than the same time last year
- This is despite the coronavirus outbreak bringing market to a standstill
- The average property price across the UK now stands at £238,511
- Here’s how to help people impacted by Covid-19
By GRACE GAUSDEN FOR THIS IS MONEY
House prices in April 2020 were still 2.7 per cent higher compared to the same time last year despite the coronavirus outbreak, new monthly data from Halifax reveals.
However, property values were down by 0.6 per cent in April compared to in March, the biggest monthly fall in two years, according to the lending giant.
This reflects the current situation in the property market which is at a near standstill due to the ongoing pandemic.
The average property price across Britain now stands at £238,511, down from February's record high of £240,461 meaning nearly £2,000 has been wiped off the value of homes.
House prices in April were still higher by 2.7% when compared to the same time last year
It is expected that property prices will continue to see further falls in the coming months, until lockdown restrictions are over and the market gets moving again.
One of the main reasons for the fall in activity is due to the social distancing measures that are presently in place, meaning property viewings are all but impossible.
Instead estate agents have had to make do with virtual tours online, hoping that buyers will still be tempted to make offers.
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Russell Galley, managing director at Halifax, said: '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.'
Drop: The number of homes available for sale has fallen dramatically over the past 11 years
However, house prices 'unexpectedly' increased in April despite the coronavirus lockdown, according to the latest housing report from Nationwide.
The average cost of a home across the country rose by 0.7 per cent over the month, and was up 3.7 per cent annually, it said.
It added that, at a record high of £222,915, the average house price is more than £3,330 above its level a year ago.
However, it is worth noting that the data in both house price reports is based on mortgage approvals and so most will have been applied for before lockdown.
The average cost of a home across the country rose by 3.7% annually, Nationwide said
Some experts are also saying that due to the current circumstances, house price indexes are nearly worthless.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: 'Lockdown restrictions are rendering these and other housing market surveys fairly meaningless.
'It is only when you look behind the figures that a more interesting picture emerges - in other words, what we are seeing on the ground are previously agreed sales proceeding to exchange and completion without price renegotiation and a build-up of browsing interest as buyers and sellers ready themselves for easing of restrictions.
'Buyers and sellers are also taking advantage of interest rates remaining low for the foreseeable future.
'Overall, we are being told that transactions are stalled and will be revisited as soon as it is safe to do so and particularly surveyors and removers are able to gain access to properties.'
Andrew Montlake, managing director at the mortgage broker, Coreco, said: 'Given the low transaction levels we're seeing at present, it's pointless to be publishing house price indices at all.
'Though the property market has been artificially paused, what we do know is that there are many buyers and sellers who remain keen to progress their move.
'We have received a lot more enquiries over the past couple of weeks, with many people now looking to move to more rural areas once this is all over given the perceived reduced risk from future peaks and pandemics.
Estate agents have had to do virtual tours online, hoping that buyers will still make offers
He adds: 'Increasingly, people want to take advantage of the fact that coming out of this pandemic there will be more home working flexibility and better technology. This means they will be required to commute into main cities less and less.
'We are on the verge of a fundamental shift in our working and social lives and the availability of housing and lending will be key to this.
'The importance of the housing market must not be underplayed in getting the economy moving again and it's crucial the Government works closely with industry stakeholders to achieve this.'
Despite some positive outlooks from experts, Lloyds Banking Group, which also includes Halifax and Bank of Scotland, revealed in its quarterly results that has a base case scenario prediction that house prices will fall 5 per cent this year.
It said that property prices would then rise 2 per cent next year and be down 0.7 per cent between 2020 and 2022.
Even its best case scenario 'upside' prediction, Lloyds said house prices would fall 2.2 per cent this year.
However, in Lloyds' severe downside forecast it said that house prices would all 10 per cent this year and slide 30 per cent by 2022.
London could be 'insulated' from a property market downturn, Lucy Pendleton, property expert at estate agents James Pendleton, warned.
She said: 'London will be insulated to a large degree because its white collar workers have been able to keep working at home.
'With housing supply in the capital still short, their buying power will be the last to be dented as part of a much more enduring economic downturn, if indeed one comes to pass.
'That confidence is underpinned by the pick up in activity and rising house prices that were buoyed by a Boris Bounce in January and February.'