UK House Prices Fall for First Time Since 2012: Nationwide

July 1, 2020 Updated: July 1, 2020

LONDON—Britain’s house prices fell in annual terms for the first time since 2012 in June as the country reeled from the coronavirus shock to the economy, mortgage lender Nationwide building society said on July 1.

Nationwide said its measure of house prices fell by 0.1 percent compared with June last year.

In monthly terms, prices fell by 1.4 percent, not as steep as May’s 1.7 percent fall, which was the biggest drop in more than 11 years.

A Reuters poll of economists had pointed to an annual rise of 1.0 percent and a monthly fall of 0.7 percent.

The government eased restrictions on the housing market in mid-May, but data published by the Bank of England earlier this week showed the lowest number of mortgage approvals on record during that month.

Nationwide’s chief economist, Robert Gardner, said a further easing of broader lockdown measures in the coming weeks was likely to lead to a slight pick-up in activity in the housing market, but the medium-term outlook remained highly uncertain.

“The raft of policies adopted to support the economy, including to protect businesses and jobs, to support people’s incomes and keep borrowing costs down, should set the stage for a rebound once the shock passes, and help limit long-term damage to the economy,” he said.

Nationwide said on a seasonally adjusted basis, house prices in June were 3.2 percent lower than in April.

It said its sample sizes had remained sufficiently large to generate an accurate reading of price changes.

In London, house prices rose by an annual 2.1 percent over the second quarter and average prices in the capital were just 3 percent below all-time highs struck in early 2017.

A Reuters poll of property market analysts published last week showed prices in London were expected to fall 5.0 percent this year before rising 2.0 percent next year and 4.3 percent in 2022.

By William Schomberg