House prices fell by 0.6% in April compared with the previous month as a result of the UK lockdown, according to the latest Halifax House Price Index.
Compared with the same period last year, house prices were 2.7% higher than they are now. It comes after the latest set of results for the RICS Residential Market Survey revealed that sentiment across the UK housing market “predictably” deteriorated in March as the Government measures required estate agents to close their offices.
After a run of three successive monthly increases, buyer demand has a net balance of -74% (+17% in Feb). Sales volumes are down to -69% (+19% in Feb) and new instructions – 72% (+11% Feb).
Mortgage approvals also fell in March. Bank of England figures show that the number of mortgages approved to finance house purchases were 56,161 in March 2020 – this represents a 24% month on month fall from February, following four consecutive rises
Russell Galley, managing director, Halifax, said: “The impact of measures taken to curtail the spread of coronavirus started to filter through to the housing market in April, with average prices falling by 0.6% compared to March, and the annual growth rate easing to 2.7%.
“With market activity currently almost at a complete standstill, the limited number of transactions available means that calculating average house prices has inevitably become more challenging. This will lead to a great deal of volatility until more data becomes available.”
He added: “It will not be until after lockdown restrictions are eased that we will get a sense of the new temporary normal conditions for the housing market. Social distancing raises new challenges for home viewings and valuations and this will require the industry to adapt to build and maintain consumer confidence.
“More immediately, we are likely to see some considerable movement in activity levels as buyers and sellers seek to kick-start previously agreed transactions which are likely to have stalled or been delayed.”