"in this volatile market, real estate has held its value or, in many areas, actually grown in price throughout the first four months of 2020."
House prices in April were still 2.7% higher than in the same month a year earlier and 0.7% higher than in the preceding three months.
Russell Galley, managing director of Halifax, said: “The impact of measures taken to curtail the spread of coronavirus started to filter through to the housing market in April, with average prices falling by 0.6% compared to March, and the annual growth rate easing to 2.7%.
“With market activity currently almost at a complete standstill, the limited number of transactions available means that calculating average house prices has inevitably become more challenging. This will lead to a great deal of volatility until more data becomes available.
“It will not be until after lockdown restrictions are eased that we will get a sense of the new temporary normal conditions for the housing market. Social distancing raises new challenges for home viewings and valuations and this will require the industry to adapt to build and maintain consumer confidence. More immediately, we are likely to see some considerable movement in activity levels as buyers and sellers seek to kick-start previously agreed transactions which are likely to have stalled or been delayed.
“The future remains uncertain and based on our current forecasting we expect short-term headwinds to house prices, although we maintain our underlying confidence in the health of the housing market in the longer term.”
Jamie Johnson, CEO of FJP Investment, commented: “Halifax’s findings should be viewed in an optimistic light. There’s been so much negative speculation about a potential house price crash that we fail to appreciate the positive news or listen to what the data we actually have to hand is telling us – namely, that in this volatile market, real estate has held its value or, in many areas, actually grown in price throughout the first four months of 2020.
“Yes, house prices have dropped month on month, but that is to be expected given the circumstances. Transactions have declined, but this a combination of major mortgage lenders retreating from the market and the obstacles of completing deals due to lockdown measures.
“What’s more, today’s findings suggest the property market is well-positioned to quickly recover once the pandemic subsides. If rumours are true and Boris Johnson begins relaxing lockdown measures this month, we could even see a surge in transaction activity as buyers and sellers look to push ahead with plans that have been on hold.”
Lucy Pendleton, property expert at James Pendleton estate agents, added: “Volumes were too thin last month to make this slight monthly decline statistically significant.
“If this data is worth anything at all, it actually betrays a story of strength. The annual growth rate remains nearly 3% and this is yet more evidence of how well the market was doing before the pandemic struck.
“This fact will play a significant role in what prices look like when the market restarts. A bullish picture going into this crisis actually means we are likely to see healthy prices when we return. There will be a period in which vendors test the water but you can expect them to stand behind valuations they were confident of achieving before the lockdown began."
