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June 3, 2020

UK house prices fall at fastest rate since 2009 amid Covid-19

World

June 3, 2020

LONDON: House prices across the UK fell at the fastest rate last month since the financial crisis, as prospective buyers said they would wait six months before returning to the housing market.

The average price of a home dropped by 1.7% in May from the previous month, to £218,902, according to Nationwide, one of the UK’s largest mortgage lenders. This comes after April’s gain of 0.9% and is the biggest monthly fall since February 2009, when the average cost of a home was £147,746. The annual growth rate slowed to 1.8%, down from 3.7% in April and the slowest since December, reported international media. In early 2020, before the coronavirus pandemic struck the UK, the housing market had been gathering momentum after the general election as confidence returned to the market. But the “Boris bounce” was expected to be short-lived because of uncertainty around the Brexit process. The nationwide lockdown imposed by the government on 23 March to contain the Covid-19 pandemic brought the housing market, and the wider economy, to an abrupt standstill. House moves were banned apart from those that were “reasonably necessary”, estate agents were banned from listing new properties and househunters were only allowed to conduct virtual viewings. After seven weeks of lockdown the housing market reopened in mid-May. Data from HMRC showed residential property transactions were down 53% in April compared with the same month in 2019. Nationwide said potential buyers were now planning to wait six months on average before entering the market, and 12% of the population had put off moving because of the lockdown. The lender said about 15% of people were considering moving as a result of life in lockdown, with a third stating they thought differently about their home, especially the importance of a garden and more indoor space. But 22% of people were considering improving their home instead.