Big house price monthly fall
Average house prices fell 1.7% last month compared with a month earlier, according to the latest figures from Nationwide building society.
It’s the most significant monthly fall in house prices for 11 years.
On an annual basis, house prices continued to rise, but the pace of that growth slowed.
Average prices rose by 1.8% in the year to May, down from 3.7% annual growth the previous month.
Robert Gardner, chief economist at Nationwide, said:
The medium-term outlook for the housing market remains highly uncertain.
We have already seen a sharp economic contraction as a result of the necessary measures adopted to suppress the spread of the virus.
Despite this short-term market contraction, Nationwide believes that the government policies designed to help the economy should support a rebound once the coronavirus shock passes, with minimal long-term damage to the property market.
These same measures should also help ensure the impact on the housing market will ultimately be less than would normally be associated with an economic shock of this magnitude.
We have to go back to February 2009 to see such a significant monthly decline in house price growth.
Before the Covid-19 crisis hit in the UK, property prices were gradually improving, with rising activity levels and price growth.
The property market is supported by positive employment figures, the low cost of borrowing, and a more stable political environment.
Nationwide said official data from HM Land Registry showed residential property transactions were down by 53% in April, on an annual basis. Despite this dramatic fall in transaction volumes, they say their ability to generate the house price index has not been impacted to date.
Despite the property market in England reopening on 13th May, a survey carried out by Nationwide suggested that people had put off moving as a result of the lockdown.
Would-be property buyers are planning to wait for an average of six months before house hunting.