It’s too soon to hit the panic button on house prices

Linda J. Dodson

Clearly, with the UK economy braced for its worst recession in three centuries, no right-minded analyst is pencilling in growth for 2020, but predictions differ wildly about the severity of any reversal.

EY expects a 5pc slump – bad but not even close to past dips; Lloyds is sitting on the fence with a range of 5pc to 10pc; Nationwide is more downbeat, with a guess of 13.8pc; and the Bank of England’s desktop Covid-19 stress tests have come up with a 16pc plunge, the most doom-laden of all.

There are other reasons to think a protracted decline is looming.

Mortgage approvals collapsed to a record low in April; and as Nationwide points out, the unemployment rate is expected to surpass its 8.5pc peak during the last recession as millions of workers are laid off.

But we shouldn’t read too much into this data. The housing market was in lockdown during April and for half of May, so there were very few transactions.

On March 27, the Government shut down the property market, prompting both the Office for National Statistics and property portal Rightmove to suspend their indices. But demand has already picked up again since a ban on viewings was lifted.

Besides, there is much to be reassured by, not least all that the Government has done to support the economy, which has fuelled expectations of a reasonably quick bounce – if not the much-hoped-for V-shaped recovery.

As a nation, we are obsessed with the fate of the housing market. Experts will be trying to predict the next crash from now till doomsday.

And yet, despite the boom-and-bust nature of every cycle, long-term prices have only gone up. It’s too soon to panic.

Payouts take shine off Lewis years

So much for Dave Lewis’s big send-off. With Britain’s biggest grocer firing on all cylinders again, Lewis’s legacy looked firmly secured when his surprise departure from Tesco was announced last October.

Sure, the share price isn’t anywhere near where he would have liked it to be after a five-year slog but few will disagree that his turnaround has been a success.

Yet, recent events have taken some of the shine off the Lewis years. A decision to pay out a £635m dividend, at the same time as accepting a £585m business rates holiday, was either short-sighted of the board, or downright pig-headed.

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