Monitoring the housing market is very important for many, particularly those doctors and dentists who are looking to purchase their first home or who are investing in buy-to-let properties. Our monthly Property Price Update gives you a summary of what the experts are saying.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
What’s happening in the UK Property Market?
The downward trajectory of UK house prices in response to the coronavirus finally hit in May and has continued through June. Houses prices fell 1.4% month-on-month, following a 1.7% decrease from the month prior.
Annual house price growth dropped significantly from May, from 1.8% to -0.1% in June — the first time since 2012 that house price growth dropped into the negative. The average house price in June was £216,403, down again from May’s £218,902.
The Coronavirus effect
During the first few months of the year, activity levels and price growth in the housing market had been growing steadily thanks to strong labour market conditions, low borrowing costs, and a more stable political climate.
But now, the significant impact of the lockdown is being felt.
Economic output dropped by 25% from the beginning of March to the end of April – nearly four times more than during the financial crisis.
There’s been a slight uptick in residential property purchases since April, but the figures are still down year on year. Housing market activity has also taken a downturn. Mortgage activity decreased drastically — down to just 9,300 in May from 73,700 in February, an 86% decrease year on year. Luckily, there’s still adequate sample sizes, so collection and generation won’t be an issue when calculating data.
The promise of restrictions being lifted is enough to provide hope for the housing market. But in the medium-term future, it’s still hard to say what the market will look like. As usual, the housing market is highly dependent on the wider economy, so it’s all down to how the public reacts to further mandates concerning COVID-19.
Government recovery policies that are designed to protect businesses and jobs and to safeguard the public’s incomes while also keep borrowing costs down are meant to help mitigate long-term economic damage in an effort to rejuvenate the economy after the immediate shock.
Stay in the know
There’s never been a more important time to keep an eye on the market and the changes from month to month, so be sure to check back monthly for all the updates on the UK property market.
Figures quoted from Nationwide House Price index June 2020.
Always remember to visit our site monthly for your regular update on the nation’s property prices.
If you’re planning to buy or sell property this year contact an advisor for personalised advice.
At Dental & Medical Financial Services, our experts are dedicated to helping our clients select the right mortgage deal for your needs. If you’re ready to take the first step toward home-buying, get in touch with us today.