UK house prices face unpredictable blow from coronavirus after March rise
UK house prices jumped in March, before the impact of the coronavirus lockdown was felt.
House prices were up three per cent year on year. However, on a monthly basis, UK house prices were flat.
The average UK house price was £240,384 last month, according to the latest Halifax research.
However, the outbreak of coronavirus in the UK is likely to have a negative impact on house prices. Lockdown measures introduced at the end of March have caused buyers and sellers to put house moves on hold.
Russell Galley, Managing Director, Halifax, said: “The UK housing market began March with similar trends to previous months. Key market indicators showed a sustained level of buyer and seller activity.
“Overall average house prices in the month were little changed from February’s record high, while annual growth nudged up to 3 per cent.
He said confidence was rising as political and economic uncertainty eased.”
“However, it’s clear we ended the month in very different territory as a result of the country’s response to the coronavirus pandemic.”
Market at a standstill
The government’s lockdown measures have caused viewings by estate agents, surveyors and potential buyers fall. Meanwhile, many potential sellers are delaying house moves.
Howard Archer, chief economic advisor at EY Item Club, said: “The housing market looks set to be essentially at a standstill for the next few week at least.
“The government has advised homebuyers and renters to delay moving as much as they can while the emergency measures are in place.
“The government has further stated that no visitors are allowed to visit properties while “stay-at-home” measures are in force, including estate agents and surveys as well as potential buyers.”
Jeremy Leaf, former Rics residential chairman, said that “social distancing has wiped out most market activity “.
However, Leaf added that “online viewing and interest in property videos has held up well”.
“Most potential buyers and sellers are putting moves on hold, biding their time and will check on market movements in the hope that they can return in the not-too-distant future.'”
When will UK house prices pick up?
Archer added: “Once restrictions start to be lifted on people’s movements, housing market activity should progressively pick up.
However, “the housing market looks unlikely to return to the levels seen at the start of 2020 for some time”.
“Given the major hit that the economy is taking, the likely substantial rise in unemployment and the hit to incomes.”
Benham and Reeves director Marc von Grundherr said UK house price growth could continue when restrictions are lifted.
He said: “Any impact to the market should only be prevalent for the duration of our current lockdown.
“A freeze on both the side of buyers and sellers should also help reduce any immediate decline to price growth.”
“We can rest assured that once the market does spring back into action, the green shoots of strong growth seen earlier in the year will start to bloom.”
“The outlook will be much brighter,” he added.