Hope of bounceback despite the third fall in house prices
THE average house price in the UK fell for the third month in a row in May to stand at £237,808.
Values across the country dipped month on month by 0.2 per cent following slips of 0.6 per cent in April and 0.3 per cent in March, according to the Halifax index.
But despite the decline, residential property prices are 2.6 per cent higher when compared with a year ago.
Russell Galley, managing director of the Halifax, said: “The full impact of lockdown measures took a firm grip on the market in May.
“Though more modest than in April, the fall reflects a continued loss of momentum following what was a strong start to the year.
“It should be noted that, with a limited number of transactions available, calculating average house prices remains challenging and increased volatility is to be expected.”
Halifax’s research paints a less severe picture of the extent to which values fell in May when set against figures released by Nationwide Building Society earlier this week.
Its index showed a dive of 1.7 per cent month on month – or more than £4,000 on average.
Nationwide claimed it was the biggest monthly fall in property values in 11 years. But according to Halifax, the decline in May meant only £506 being knocked off homes.
Mr Galley added: “The mid-month relaxation of restrictions in England, allowing estate agents and conveyancers to restart operations, brought much-needed positive news.
“Some advance indicators of buyer and seller interest quickly showed signs of improvement.
“This is likely to provide a shortterm boost as buyers and homeowners attempt to kickstart transactions that had previously been put on hold.
“We expect market activity to increase progressively as restrictions are eased further across the UK and we continue to have confidence in the underlying health of the housing market over the long term.
“But the extent of downward pressure on market confidence and prices over the coming months will depend on how quickly the economy is able to recover from the pandemic and the available government policy support for jobs and households.”
North London Estate agent Jeremy Leaf, a former residential chairman of the Royal Institution of Chartered Surveyors, said: “Unlike the gloomy Nationwide figures, Halifax demonstrates a more hopeful picture.
“Activity has picked up from its very low base, with many of the pre-lockdown sales put on hold resuming, albeit cautiously as buyers and sellers come to terms with the new normal.”
Mark Harris, from mortgage broker SPF Private Clients, said: “House prices are of limited value when measuring the health of the housing market, particularly true when so few transactions are skewing the results.”