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House price growth falls as coronavirus fears hit market

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
06/03/2020

House prices increased by 2.8% in the year to February, as critics warned the coronavirus could impact the market in the coming weeks and months.

Growth fell from a near two-year high of 4.1% measured at the start of the year, according to data from lender Halifax.

Between January and February prices nudged up by 0.3%, and on a quarterly basis by 2.9%.

The average value now stands at £240,677.

Critics said the market had started the year on the front foot thanks to a boost from December’s election outcome and increased political certainty.

However, it is now feared the coronavirus and its wider impact on the economy could hit house prices and confidence in the market.

Russell Galley, managing director at Halifax, said: “Much like we saw in January, the increases seen in February reflect the continued improvement of key market indicators.

“The sustained level of buyer and seller activity is strong compared to recent years, with positive employment conditions and a competitive mortgage market continuing to support demand.

“Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continue to exert pressure on the economy and we wait to see how these will affect housing market sentiment later in the year.”

‘Coronavirus collapse unlikely’

Jonathan Hopper, CEO of Garrington Property Finders, said price growth may have slowed, backing off from what could have been an entire quarter of 4%-plus annual gains, but it’s still a relatively robust performance.

“However, talk is already now turning from the staying power of the ‘Boris bounce’ to the possible effects of a coronavirus crunch.

“Any slowdown in activity is unlikely to be a result of cancelled viewings. They aren’t sporting events and, though we’ve heard of a few vendors cancelling visits because they don’t want strangers in their homes at the moment, they are very much in the minority,” he said.

Hopper added that the virus is wreaking havoc on the stock market and the downturn is currently affecting all the world’s indices which threatens to erode confidence of would-be house hunters in the short-term.

But he added: “In the medium-term though, Britain’s patient buyers and sellers waited so long for Brexit turbulence to pass that the resulting pent-up demand makes a coronavirus collapse unlikely. Notwithstanding the seriousness of the situation, in the context of the property market, we’re more likely looking at a ‘speed bump’ rather than a ‘road closure’.”