Nationwide House Price Index - June 2020

National average house prices ground to a halt in June with prices down 0.1% for the first time since 2012. However, there are big variations, with the Northwest up 4.8% year-on-year.

• Annual price growth grinds to a halt in June with prices down 0.1%
• Annual growth negative for first time since 2012
• Prices fell 1.4% month-on-month, after taking account of seasonal factors
• Regional house price growth rates within narrow range of 0%-5% in Q2

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist:

“UK house prices fell by 1.4% in the month of June, after taking account of seasonal effects, following a 1.7% fall in May. On a seasonally adjusted basis, house prices in June were 3.2% lower than in April.

“Annual house price growth slowed to -0.1%, from 1.8% in May. This is the first time that annual house price growth has been in negative territory since December 2012.

“It is unsurprising that annual house price growth has stalled, given the magnitude of the shock to the economy as a result of the pandemic. Economic output fell by an unprecedented 25% over the course of March and April – almost four times more than during the entire financial crisis.

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​“Housing market activity also slowed sharply as a result of lockdown measures implemented to control the spread of the virus. While latest data from HMRC showed a slight pickup in residential property transactions from April’s low, in May they were still 50% lower than the same month in 2019 
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“Mortgage activity saw an even more dramatic slowdown – there were only 9,300 approvals for house purchase in May, down from 73,700 in February and 86% lower than in May 2019.

“With lockdown measures due to be eased in the weeks ahead, housing market activity is likely to edge higher in the near term, albeit remaining below pre-pandemic levels. Nevertheless, the medium-term outlook for the housing market remains highly uncertain. Much will depend on the performance of the wider economy, which will in turn be determined by how the pandemic and restrictions on activity evolve (including any behavioural shifts).

“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 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 less than would normally be associated with an economic shock of this magnitude.

Modest annual price growth across most regions in Q2

“All UK regions saw modest annual price growth of between 0% and 5% in Q2 as a whole (i.e. taking April, May and June together and comparing with the same period of 2019). The Northwest was the strongest performing region, with annual price growth picking up slightly to 4.8%​.

“Elsewhere in England, house price growth across northern England as a whole (North, Northwest, Yorkshire & Humberside, East Midlands and West Midlands) converged with that in the south (London, Outer Metropolitan, Outer South East and East Anglia).

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