Annual UK house prices fell by 0.1% in June, marking the first year-on-year decline since December 2012, according to Nationwide Building Society. The average property value now stands at £216,403, after a monthly fall of 1.4% – slightly less severe than the 1.7% drop recorded in May.
Nationwide’s chief economist, Robert Gardner, said the decline was unsurprising given the scale of the economic shock caused by the coronavirus pandemic. He noted that economic output fell by an unprecedented 25% over March and April, nearly four times the drop seen during the entire financial crisis, while housing market activity slowed sharply under lockdown measures.
Gardner suggested that activity was likely to edge higher in the near term as restrictions ease, but would remain below pre-pandemic levels. He added that the medium-term outlook for the housing market was highly uncertain, with performance dependent on the wider economy and the evolution of the pandemic.
In quarterly figures, no UK region recorded a price fall when comparing April, May and June with the same period in 2019. The north-west was the strongest performing region, with annual growth of 4.8%. Scotland saw the strongest growth among the nations at 4.0%, while Wales and Northern Ireland recorded increases of 1.0% and 0.1% respectively. London prices remained 3% below their 2017 peak but 55% above 2007 levels.
Jeremy Leaf, a north London estate agent and former residential chairman of the Royal Institution of Chartered Surveyors, said prices were being kept in check by affordability issues and rising supply, but demand was picking up as buyers emerged from lockdown with a desire to move and took advantage of low interest rates.
