Four straight months of house price falls for the first time since financial crisis

British house prices have fallen for four months for the first time since the market was recovering from the global financial crisis in 2010, new data show. 

Property values in June were 0.1pc lower than in May, according to lender Halifax’s latest index.

Since March, as coronavirus began to take hold, values have fallen by 1.2pc.

Overall, the average British home has lost £2,222 in value since the coronavirus pandemic began, bringing the average price down to £237,616, Halifax found.

However, house prices in June were still 2.5pc higher than in the same month last year, due to a rally in the aftermath of the decisive Conservative election victory at the end of 2019.

June was the first full month of activity for the English market, which reopened in mid-May after a seven-week shutdown. The Welsh, Northern Irish and Scottish markets only reopened later in June.

Housing market activity has largely recovered since the markets reopened, but analysts are not optimistic that the transaction levels can be sustained once pent-up demand after lockdown has filtered through the market.

Bigger price falls could be ahead. Russell Galley, of Halifax, said: “We expect greater downward pressure on prices in the medium-term, the extent of which will depend on the success of Government support measures and the speed at which the economy can recover.”

The autumn will likely be a turning point, when the Government’s wage support scheme ends and the full impact of coronavirus on the labour market will become more clear.

But for now, mortgage inquiries nearly doubled between May and June, said Mr Galley. This suggests that transaction activity will continue to rise in the coming months at least.

Agents across the country are reporting a post-lockdown boom in sales. David Westgate, of Andrews Property Group estate agents, said: “We have just had the best four weeks of business trading in 2020 and the figures coming in are actually slightly higher than this time last year.

“The great unknown is whether the bounce we have seen in recent weeks is simply a dead cat bounce.”

Jeremy Leaf, a north London estate agent, said: “Certainly we are starting to see supply increasing and greater realism in sales agreed so do not expect prices to rise sharply in the near term.”

Discussions around stamp duty will also be a new factor for the property market going forwards, added Mr Leaf.

Chancellor Rishi Sunak has trailed plans for a stamp duty holiday, which is expected to be announced on Wednesday to come into effect in the Autumn Budget. Many fear transactions will now stall as buyers pull out of their chains to wait for the tax discount.

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