The latest figures from Nationwide have shown that March continued to enjoy the kind of positivity and confidence in the market that grew from the start of the year – with annual growth at the highest since January.
Robert Gardner, Nationwide’s Chief Economist, comments on the figures: “Annual house price growth increased to 3% in March, up from 2.3% the previous month – the fastest pace since January 2018 (when annual growth was 3.2%). The last six months have all seen month-on-month increases, after taking account of seasonal effects.
“It is important to note that, while we use a full month’s worth of data to generate the index, the cut-off point is slightly before the end of the month. This means that developments following the UK government’s lockdown will not be reflected in these figures.
“In the opening months of 2020, before the pandemic struck the UK, the housing market had been steadily gathering momentum. Activity levels and price growth were edging up thanks to continued robust labour market conditions, low borrowing costs and a more stable political backdrop following the general election.
“But housing market activity is now grinding to a halt as a result of the measures implemented to control the spread of the virus, and where the government has recommended not entering into housing transactions during this period. Indeed, 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.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “These figures would have been interesting in the normal run of things as they confirm that the market was gathering momentum in early 2020 but they have become academic in view of what has happened since.
“However, they do raise expectations that when restrictions begin to ease, hopefully relatively soon and without too much damage to the economy, there is every chance that activity will pick up nearly where it left off.
“On the ground, nearly all our exchanges have happened in the past week, with more expected in the next few days. We are finding that only those industries particularly badly affected by coronavirus are having to pull out of transactions, such as those working in the travel, hospitality or entertainment industries.”