UK house prices go into a gentle decline

published 9 July 2020

UK house prices are falling, reports Joe Curtis for City AM. Halifax’s data shows that prices declined for the fourth month in a row in June, the longest losing streak since 2010. That came despite a sharp recovery in market activity last month, with new mortgage enquiries up by 100% since May. Last week Nationwide reported that British house prices fell on an annual basis for the first time in eight years in June. Still, the 0.1% setback will hardly leave anyone with negative equity.

Yet some corners of the property market are positively frenetic, says James Pickford in the Financial Times. Property site Zoopla reported last month that sales are 4% higher than before the pandemic, while asking prices are up by 7% on the year. The optimism looks misplaced, but even if property takes a turn for the worse the crash is unlikely to be as bad as previous slumps thanks to tighter lending conditions, the decline of buy-to-let and the greater prevalence of fixed-rate mortgages.

“Covid-19 refugees” are fleeing London, sparking a boom at the top end of the rural housing market, says Melissa Lawford in The Daily Telegraph. Some houses are going for “as much as 17% over asking price” because of bidding wars. Yet estate agents are sceptical that the rural property boom can continue. This looks like a “bubble”, says buying agent Jess Simpson, but “the general feeling is this frenzy will peter out in the autumn”.