UK house prices fall for longest period since 2010, Halifax says

British house prices fell for a fourth month in a row in June as COVID-19 restrictions continued to depress the market, the longest run of monthly declines since 2010, mortgage lender Halifax said on Tuesday. Halifax said average house prices dropped by 0.1% in June after a 0.2% fall in May, a smaller decline than most economists had forecast in a Reuters poll. Prices in the three months to June were 0.9% lower than in the first quarter of 2020, the largest quarterly fall since 2011.

Britain’s housing market ground to a halt in April and May, when lockdowns prevented potential buyers from visiting properties. The Bank of England said lenders approved the fewest new mortgages on record in May. Compared with a year earlier, prices are still up by 2.5%, and Halifax said new mortgage enquiries had doubled in June – in line with reports from estate agents of a bounce in activity after lockdown restrictions ended in England.

Many British households have been cushioned from the immediate economic impact of the lockdown by a government jobs guarantee scheme, and the Bank of England and other economists forecast a surge in unemployment when it ends later this year.

Howard Archer, chief economic adviser to consultants EY ITEM Club, said he expected prices to fall by 3% over the next few months. “Housing market activity is likely to be limited for some time to come by the major hit that the economy has taken and the fact that consumer fundamentals have clearly taken a substantial downturn as a result of coronavirus,” he said.

UK house prices fall for longest period since 2010, Halifax says, Reuters, Jul 7