UK annual house prices fell for the first time since December 2012, dropping 0.1% year-on-year in June, according to Nationwide building society. The monthly decline of 1.4% brought the average UK house price to £216,403, following a 1.7% fall in May.
Nationwide's chief economist Robert Gardner attributed the stall to the coronavirus pandemic, noting that economic output fell by an unprecedented 25% during March and April. Housing market activity slowed sharply due to lockdown measures, though Gardner expects activity to edge higher as restrictions ease, remaining below pre-pandemic levels.
Despite the overall decline, no UK regions saw price falls when comparing the second quarter of 2020 with the same period in 2019. The north-west was the strongest performer with annual growth of 4.8%, while Scotland led among nations with 4.0% growth. London prices remained just 3% below their 2017 all-time highs and 55% above 2007 levels.
Gardner stressed that the medium-term outlook is highly uncertain, depending on the pandemic's evolution and economic recovery. Jeremy Leaf, a north London estate agent, noted that prices were kept in check by affordability and increasing supply, but demand was rising as buyers emerged from lockdown to take advantage of low interest rates.
