The Nationwide says government measures mean the impact of Coronavirus on the housing market may be “much less” damaging than many may expect.
However, the building society is warning that house price movements may be difficult to calculate in the next months because of the temporary near-halt to transactions.
The statements come alongside Nationwide’s price index for March, which is based on data gathered almost entirely before the outbreak and lockdown across the UK.
Robert Gardner, Nationwide’s chief economist, says: “A lack of transactions will make gauging house price trends difficult in the coming months. The medium-term outlook for the housing market is also highly uncertain, where much will depend on the performance of the wider economy.
“Economic activity is set to contract significantly in the near term as a direct result of the necessary measures adopted to suppress the spread of the virus. But the raft of policies adopted to support the economy, including to protect businesses and jobs, to support peoples’ incomes and keep borrowing costs down, should set the stage for a strong rebound once the shock passes, and help limit long-term damage to the economy.
“These same measures should also help ensure the impact on the housing market will ultimately be much less than would normally be associated with an economic shock of this magnitude.”
The March index from the society - clearly reflecting the market prior to the lockdown - shows that Wales was the strongest performing national region in the first quarter of 2020, with annual price growth picking up to 6.4 per cent.
Following several quarters of little or no growth, England saw annual house price growth increase to 1.9 per cent.
Conditions remained subdued in Scotland and Northern Ireland, which saw annual price growth of 0.8 per cent and 0.7 per cent respectively.
London saw a recovery in annual house price growth to 1.0 per cent following 10 consecutive quarters of annual price declines.
Average prices in the capital are still only four per cent below the all-time highs recorded in the first quarter of 2017 and over 50 per cent above their 2007 levels.
UK prices, meanwhile, are currently 19 per cent higher than their 2007 peak according to these pre-virus Nationwide statistics.
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Completions likely to be down 35% on the usual 1 to 1.2M annual number if agents are not functioning for 90 days, as this is key listing and selling season. I hope this is not the case and normality comes sooner but maybe it is a late Autumn market we now are looking at.
On the positive, no-one knows and for sure there is a massive pent up demand to do property business at all levels. So by the end of 2021 a correction of activity will probably have occurred.
Oh please, this could be only on a website called 'Estate Agent Today' . In the real world we are already in economic meltdown, once Furlough leave ends hundreds of thousands will be without jobs. Prices are only going in one direction and they won't recover for years, no one can forecast how bad it will be but it will be bad, very very bad. The only people talking positively are those with a direct interest
Agreed, not even two weeks in to lock down and already the 'experts' are already coming out with their predictions. Think we've had enough of experts in this country.
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