Published: 30/06/2020House prices fell sharply for the second month running in June as the impact of the economic slump triggered by the lockdown starts to feed through to the property market.
Nationwide Building Society said the outlook for prices remains “highly uncertain” as it revealed that the average value of a home dipped 1.4 per cent in June. This follows a 1.7 per cent drop in May. They are the biggest monthly declines since the financial crisis in 2009.
The consecutive falls means that prices are 0.1 per cent lower than a year ago across the country as a whole, the first annual fall since 2012.
However, property analysts said that while the figures were “bad, perhaps very bad” there were few signs yet of a full scale collapse on the scale seen during the banking crisis or the early Nineties recession.
Nationwide’s chief economist Robert Gardner, 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 per cent 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.”
He added: “With lockdown measures due to be eased in the weeks ahead, housing market activity is likely to edge higher in the near term, albeit remaining below pre-pandemic levels. Nevertheless, the medium-term outlook for the housing market remains highly uncertain. Much will depend on the performance of the wider economy, which will in turn be determined by how the pandemic and restrictions on activity evolve.”
Quarterly figures show London prices rising 2.1 per cent in the second quarter of the year, although this reflect deals agreed before or early in the lockdown