Solid growth for UK house prices before coronavirus-induced market freeze

UK house prices were flat in the month to March and up 3 per cent on a year ago, according to the latest house price index from the Halifax.

Prices in the January to March quarter were also up 2.1 per cent on the last three months of 2019, today’s report confirmed.

Russell Galley, Halifax managing director, said: “The UK housing market began March with similar trends to previous months, as key market indicators showed a sustained level of buyer and seller activity. Overall average house prices in the month were little changed from February’s record high, while annual growth nudged up to 3 per cent.

“These factors all underlined a positive trajectory and increased momentum in the early part of the year, with confidence rising as political and economic uncertainty eased. However, it’s clear we ended the month in very different territory as a result of the country’s response to the coronavirus pandemic.”

Indeed, the effects of Covid-19 began to rapidly take hold of the market mid-way through March, forcing it into an almost total freeze by the end of the month.

“On a practical level, most market activity has been paused, with the public rightly following advice to stay at home, and estate agencies, surveyors and conveyancers temporarily closing as a result,” Russell said.

“With viewings cancelled and movers being encouraged to put transactions on hold, activity will inevitably fall sharply in the coming months. It should be noted that with less data available, calculating average house prices is likely to become more challenging in the short-term.”

Looking ahead, Russell said it was too early to properly assess the potential long-term impacts of the lockdown on the housing market.

“While there is very significant uncertainty at the moment, much will depend on the length of time it takes for restrictions to be lifted, the pressure that has been exerted on the economy in the meantime and the effect this has on consumer sentiment.”