House prices drop 0.6% as sales plummet during pandemic

The average UK house price dropped by 0.6% in April compared with the previous month as market activity ground to a halt during the coronavirus crisis, the latest figures show. 

But prices last month were still 2.7% higher than in April 2019, while prices in the latest quarter (February to April) are up 0.7% compared with the preceding three months (November to January).

Halifax’s managing director, Russell Galley, 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.”

But given the low transaction levels at the moment, it is quite simply “pointless” publishing house price indices at all, according to Andrew Montlake, managing director at the UK-wide mortgage broker, Coreco. 

He commented: “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.

“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.”

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