UK house prices show first annual decline in eight years

Michelle K. Wallace

UK house prices last month fell for the first time in eight years, a key building society survey said, as the property market makes an uncertain return to business after lockdown. Nationwide’s house price index showed prices in June were down 0.1 per cent year-on-year, after increasing 1.8 per cent […]

UK house prices last month fell for the first time in eight years, a key building society survey said, as the property market makes an uncertain return to business after lockdown.

Nationwide’s house price index showed prices in June were down 0.1 per cent year-on-year, after increasing 1.8 per cent the previous month, in the first decline since December 2012.

Prices for homes in the UK fell by 1.4 per cent month-on-month, taking into account seasonal changes, after a fall of 1.7 per cent the previous month. House prices in June were 3.2 per cent lower than in April.

The building society’s chief economist said stalling house price growth was “unsurprising” given the pandemic’s shock to the economy, which has forced viewings and transactions to freeze.

“While latest data from HMRC showed a slight pick-up in residential property transactions from April’s low, in May they were still 50 per cent lower than the same month in 2019,” Robert Gardner said on Wednesday.

Owners and buyers are looking with caution to the uncertain outlook of the next few months.

Nationwide’s figures showed a further slowdown in mortgage activity, with only 9,300 approvals for purchasing homes in May, 86 per cent down from the same month last year. February recorded 73,700 mortgage approvals.

“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,” Mr Gardner said. “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.”

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