UK house prices go into a gentle decline

published 9 July 2020

UK house prices are falling, reports Joe Curtis for City AM. Halifax’s data shows that prices declined for the fourth month in a row in June, the longest losing streak since 2010. That came despite a sharp recovery in market activity last month, with new mortgage enquiries up by 100% since May. Last week Nationwide reported that British house prices fell on an annual basis for the first time in eight years in June. Still, the 0.1% setback will hardly leave anyone with negative equity.

Yet some corners of the property market are positively frenetic, says James Pickford in the Financial Times. Property site Zoopla reported last month that sales are 4% higher than before the pandemic, while asking prices are up by 7% on the year. The optimism looks misplaced, but even if property takes a turn for the worse the crash is unlikely to be as bad as previous slumps thanks to tighter lending conditions, the decline of buy-to-let and the greater prevalence of fixed-rate mortgages.

“Covid-19 refugees” are fleeing London, sparking a boom at the top end of the rural housing market, says Melissa Lawford in The Daily Telegraph. Some houses are going for “as much as 17% over asking price” because of bidding wars. Yet estate agents are sceptical that the rural property boom can continue. This looks like a “bubble”, says buying agent Jess Simpson, but “the general feeling is this frenzy will peter out in the autumn”.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Explore More

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.