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House price growth hit two-year high before coronavirus

Paloma Kubiak
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Paloma Kubiak

House price growth was at its strongest level in more than two years before the coronavirus pandemic hit the market, data showed.

Values increased by 3% in the year to March, the highest reading since January 2018, according to Nationwide Building Society.

The average UK home price now stands at £219,583, according to the mutual’s figures.

However, the data is largely unaffected by the outbreak of the coronavirus and the subsequent restrictions on the housing market.

The government has advised buyers and sellers to delay moves until social distancing measures have been lifted.

Without transaction data, Nationwide warned it would be difficult to gauge the market in the coming months.

Robert Gardner, Nationwide’s chief economist, said: “Housing market activity is now grinding to a halt as a result of the measures implemented to control the spread of the virus, and where the government has recommended not entering into housing transactions during this period.

“Indeed, a lack of transactions will make gauging house price trends difficult in the coming months.

“The medium-term outlook for the housing market is also highly uncertain, where much will depend on the performance of the wider economy.”

He added that economic activity was set to contract significantly in the near term as a direct result of the necessary measures adopted to suppress the spread of the virus.

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

Wales strongest region

Nationwide’s data for the first quarter showed Wales was overall the strongest performing region of 2020, with annual price growth picking up to 6.4%.

In England, all regions except the North saw modest price growth of up to 5%.

However, northern England as a whole generally performed better than the south, with Yorkshire & Humberside the strongest region with 4.3 per cent of growth year-on-year.

London saw a recovery in annual house price growth to 1%, following ten consecutive quarters of annual price declines.