UK house prices drop at fastest rate since 2009
As a result, the annual rate of house price growth slowed to 1.8% from 3.7% in April.
The average UK house price now stands at £218,902.
Housing market activity slowed sharply as a result of lockdown measures with HMRC data showing residential property transactions down 53% in April compared with the same month in 2019.
Experts say it’s too early to tell if this is the start of a long-term trend or simply a short-term blip.
The government relaxed some restrictions in May, allowing the property market to reopen, while Rightmove recorded its busiest day ever last week.
However, Nationwide said the outlook for the housing market remained highly uncertain.
“Much will depend on the performance of the wider economy,” said Robert Gardner, Nationwide’s chief economist.
“We have already seen a sharp economic contraction as a result of the necessary measures adopted to suppress the spread of the virus.
“However, 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 rebound once the shock passes, and help limit long-term damage to the economy.
“These same measures should also help ensure the impact on the housing market will ultimately be less than would normally be associated with an economic shock of this magnitude.”
Meanwhile, a recent study by Nationwide suggested 12% of people had put off moving as a result of the lockdown.
Most viewed the current situation as a temporary pause in the market, with would-be buyers now planning to wait six months on average before looking to enter the market.
Peoples’ housing preferences have also be impacted.
Around 15% of people surveyed said they were considering moving as a result of life in lockdown, with a third (34%) stating they think differently about their home as result of the Covid-19 outbreak, especially the importance of a garden and the need for more indoor space.