Nationwide House Price Index - July 2020

House price growth rebounded in July as activity bounces back, with prices up 1.7% month-on-month.

Headlines

• ​Annual house price growth recovers to 1.5% in July
• Prices up 1.7% month-on-month, after taking account of seasonal factors, reversing last month’s fall
• Stamp duty holiday likely to provide further support in the near term

Robert Gardener, Chief Economist

“UK house prices rose by 1.7% in July, after taking account of seasonal effects, offsetting the 1.6% fall in June. As a result, annual house price growth recovered to 1.5%, from -0.1% last month. On a seasonally adjusted basis, house prices in July were 1.6% lower than in April.

“The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions. 

​“The rebound in activity reflects a number of factors. Pent up demand is coming through, where decisions taken to move before lockdown are progressing.

​“Behavioural shifts may be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown. 

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Our own research, conducted in May, indicated that around 15% of people surveyed were considering moving as a result of life in lockdown.

“Moreover, social distancing does not appear to be having as much of a chilling effect as we might have feared, at least at this stage.

“These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward.

“However, there is a risk this proves to be something of a false dawn. Most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the after-effects of the pandemic and as government support schemes wind down. If this comes to pass, it would likely
dampen housing activity once again in the quarters ahead."

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