House prices fall for fourth consecutive month

7 July 2020 | General

Throughout the month of June, UK house prices saw 0.1% monthly decrease according to the latest Halifax House Price Index.

The latest quarter showed that house prices were 0.9% were lower than seen in January to March.

Despite the monthly decline, house prices in June were 2.5% higher than in the same month a year earlier.

Russell Galley, managing director at Halifax, said: “Average house prices fell by 0.1% in June as the UK property market continued to emerge from lockdown. Though only a small decrease, it is notable as the first time since 2010 – when the housing market was struggling to gain traction following the shock of the global financial crisis – that prices have fallen for four months in a row.

“Activity levels bounced back strongly in June, which is typically the busiest month for mortgage activity in the UK. New mortgage enquiries were up by 100% compared to May, and with prospective buyers also revisiting purchases previously put on hold, transaction volumes rose sharply compared to previous months. However, whilst encouraging, it remains too early to say if this level of activity will be sustained.

“The near-term outlook points to a continuation of the recent modest downward trend in prices through the third quarter of the year, with sentiment indicators, based on surveys of both agents and households, currently at or around multi-year lows.

“Of course, come the autumn, the macroeconomic landscape in the UK should be clearer and the scale of the impact of the pandemic on the labour market more apparent.

“We do expect greater downward pressure on prices in the medium-term, the extent of which will depend on the success of government support measures and the speed at which the economy can recover.”

This data from Halifax comes following latest HMRC Monthly Property Transactions data which showed a slight rise in UK home sales throughout May.

Seasonally adjusted residential transactions in May 2020 were 48,450 – up by 16% from April as the COVID-19 lockdown measures began to ease. Year-on-year, transactions in May were approximately 49.6% lower than the same time a year previous.

The easing of the lockdown measures has resulted in a slight improvement in the outlook for sales and enquiries according to the latest set of results from the RICS Residential Market Survey.

New buyer demand has moved to a net balance of -5% which has recovered from a record low of -94% in April.

This post has originally been featured in Property Wire.