House prices tough to gauge during coronavirus, Nationwide warns
Prices jumped 3.7 per cent annually in April and were up 0.7 per cent month-on-month, according to the mutual.
But the lender warned the impact of the pandemic and the subsequent UK lockdown will not be fully captured in the month’s data, which is made up of mortgage approvals that lags applications.
The average UK price now stands at £222,915.
Nationwide chief economist, Robert Gardner, said a lack of transactions in the coming months will make gauging house price trends difficult and he suggested there may also not be enough data to create the monthly index.
He added: “The medium-term outlook for the housing market is also highly uncertain, where much will depend on the performance of the wider economy.”
‘Prices will soften’
Simon Gammon, managing partner at Knight Frank Finance, said: “Though it’s too early to tell in the data, UK house prices will soon inevitably show signs of softening.
“How much that extends will depend on the length of the lockdown and any government intervention to support the market. Our current forecasts indicate house prices may decline as much as three per cent this year, before rebounding in 2021.
“This will be offset to some extent by the availability of cheap credit, which is improving every day.
“Banks that had been in retreat just weeks ago have realised the lockdown is likely to begin loosening soon and are trying to re-establish their pipelines of new business by enticing customers.
“Social distancing means conducting in-person valuations will remain tricky for some time, so any buyer hoping to secure a mortgage would do well to use time in lockdown to get their application in early to avoid being at the back of the queue when restrictions ease.”