House prices reached record average of £219,583 in March
House prices jumped to a new record of nearly £220,000 on average just before the coronavirus pandemic brought market activity to a near-standstill, according to an index.
The figures from Nationwide Building Society indicate the market had been gathering momentum as spring approached, just before measures were implemented to limit the spread of Covid-19.
Across the UK, the average price stood at £219,583 in March – up 3% compared with a year earlier, which was the fastest pace of annual growth for more than two years.
Prices increased by 0.8% month-on-month.
Robert Gardner, Nationwide’s chief economist, said: “Annual house price growth increased to 3% in March, up from 2.3% the previous month – the fastest pace since January 2018 (when annual growth was 3.2%).
“The last six months have all seen month-on-month increases, after taking account of seasonal effects.
“It is important to note that, while we use a full month’s worth of data to generate the index, the cut-off point is slightly before the end of the month.
“This means that developments following the UK Government’s lockdown will not be reflected in these figures.
“Housing market activity is now grinding to a halt as a result of the measures implemented to control the spread of the virus, and where the Government has recommended not entering into housing transactions during this period.
“Indeed, a lack of transactions will make gauging house price trends difficult in the coming months.
“The medium-term outlook for the housing market is also highly uncertain, where much will depend on the performance of the wider economy.”
Across the UK, prices in Wales performed the most strongly in the first quarter of 2020, with annual price growth picking up to 6.4%.
Following several quarters of little or no growth, England saw annual growth increase to 1.9%.
Yorkshire and the Humber was the strongest performing English region, with prices up 4.3% year-on-year.
Prices in London increased by 1% annually, following 10 quarters in a row of annual declines.
Conditions remained subdued in Scotland and Northern Ireland, which saw annual growth of 0.8% and 0.7% respectively.
Lenders are offering to extend mortgage offers for people who were on the brink of moving home so they can put their plans off until a later date.
Earlier this week, Nationwide said it was temporarily pulling its mortgage offering for low-deposit borrowers. Its fixed-rate and tracker mortgages above 75% loan-to-value (LTV) have been withdrawn from sale.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The housing market had considerable momentum before Covid-19, but now will grind to a halt.”
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “On the ground, nearly all our exchanges have happened in the past week, with more expected in the next few days.
“We are finding that only those industries particularly badly affected by coronavirus are having to pull out of transactions, such as those working in the travel, hospitality or entertainment industries.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “While purchase numbers will inevitably dip going forward as the housing market is constrained from operating as ‘normal’ due to the lack of viewings, lenders remain keen to lend, despite some having to pull back from high loan-to-value deals.”
Here are average house prices across the UK in the first quarter of 2020, followed by annual growth, according to Nationwide Building Society:
– Wales, £163,076, 6.4%
– Yorkshire and the Humber, £164,115, 4.3%
– North West, £168,230, 4.1%
– East Midlands, £188,893, 3.6%
– West Midlands, £194,047, 2.5%
– Outer South East (includes Oxfordshire, Milton Keynes, Aylesbury, Brighton and Hove, Portsmouth and Southampton) £278,838, 1.7%
– South West, £245,326, 1.5%
– East Anglia, £228,922, 1.3%
– London, £460,266, 1%
– Outer Metropolitan (includes Hertfordshire, central and west Kent, north, east and west Surrey, Reading, Slough, Windsor and Maidenhead), £358,996, 0.8%
– Scotland, £148,893, 0.8%
– Northern Ireland, £143,438, 0.7%
– North East, £129,081, minus 0.3%