Home costs fall yr on yr for the primary time in eight years, says Nationwide

HOUSE costs have fallen by 0.1 per cent in comparison with this time final yr as the consequences of the coronavirus lockdown on the property market are revealed.

It is the primary time in eight years – not since December 2012 – that values have dropped when in comparison with the identical interval the yr earlier than.

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Home costs have fallen by 0.1 per cent for the reason that similar time final yr

An index by Nationwide Constructing Society discovered that property costs fell by 1.4 per cent in June in comparison with Could, taking the common home worth right down to £216,403.

However the dip wasn’t as unhealthy because the 1.7 per cent fall recorded in Could.

Robert Gardner, Nationwide’s chief economist, mentioned that it was unsurprising contemplating the financial shock attributable to the pandemic.

Yesterday, figures from the Workplace for Nationwide Statistics revealed that the UK economy crashed by 2.2 per cent within the first three months of the yr within the joint-biggest fall since 1979.

Common home costs across the UK, in accordance with the most recent knowledge from Nationwide

The housing market stalled as gross sales had been placed on maintain after the federal government put a ban on shifting home to cease the unfold of Covid-19.

However in mid-May restrictions were eased to kick begin the economic system by way of the housing market.

Since then, the variety of home gross sales going by way of has continued to edge upwards however continues to be considerably decrease than pre-pandemic ranges.

However Mr Gardner warned that way forward for the housing market is “extremely unsure” as hundreds of thousands of consumers face contemporary unease about job security as firms axe the workforce in a bid to outlive.

Mr Gardner added: “Nonetheless, the medium-term outlook for the housing market stays extremely unsure.

“A lot will rely on the efficiency of the broader economic system, which is able to in flip be decided by how the pandemic and restrictions on exercise evolve.”

The drop in common home costs is welcome information for first-time buyers however they now face new challenges on the subject of getting a mortgage.

Many lenders have withdrawn high loan-to-value deals which means these hoping to get their first steps on the property ladder now have find a minimum 15 per cent deposit, as a substitute of 5 per cent.

The information additionally discovered that home costs in April, Could and June had been decrease than the earlier three months in Wales and Northern Eire, down 2.2 per cent and 0.5 per cent respectively.

Scotland, nevertheless, noticed a worth rise of two.5 per cent and 0.5 per cent in England.

However Nationwide added that these three-monthly figures aren’t completely correct as a result of lack of knowledge in some areas.

Craig McKinlay from Kensington Mortgages mentioned that the autumn may have been “considerably worse”, whereas Tomer Aboody from MT Finance mentioned that the autumn “is prone to be extra of a blip”.

Jeremy Leaf, a north London property agent and a former residential chairman of the Royal Establishment of Chartered Surveyors (Rics), mentioned: “Costs are being stored in examine by affordability points and extra provide regularly changing into obtainable.

“However demand is choosing up as some consumers emerge from enforced confinement in unsuitable property and/or relationships to benefit from persevering with low rates of interest, whereas sellers are extra practical.”