Land Registry House Price Index returns from furlough to show growth is slowing

The Land Registry House Price Index returned after a two month hiatus yesterday, suggesting average prices were falling before the pandemic truly hit the property market.

Its latest data showed annual house price growth slowed from 3.5% in March to 2.6% in April to £234,612 based on sales that would have completed six to eight weeks before.

Prices fell 0.2% on a monthly basis.

In comparison, the Halifax House Price Index for July had annual growth at 3.8% and Nationwide was more cautious at 1.5%.

The Land Registry said it was not possible to give an estimate of sales volumes across the UK due to the market being closed earlier this year but cited HMRC data showing that on a non-seasonally adjusted basis, transactions increased by 1.5% in the year to February 2020.

Commenting on the data, Marc von Grundherr, director at estate agency Benham and Reeves, said: “We’ve waited quite sometime for these figures and it was important they were delivered with one hundred percent certainty given the importance of their wider context.

“Of course, those quick to talk the market down will point to the fact that these sales were agreed months prior to lockdown proceedings and, we will no doubt see a wobble in price growth further down the line, due to the lag in property sale reporting.

“However, what the figures do demonstrate is a market defiant in the face of adversity.”

Much has changed in the market since April and Chancellor Rishi Sunak has since announced a Stamp Duty holiday in July.

Property data company LonRes said the Stamp Duty holiday is boosting activity but warned the market closure in March is now hitting exchanges which were down 28% annually in prime areas of the capital in July 2020.

The number of properties going under offer continued to recover in July, rising 9% annually, LonRes said.

This was the first month since March that this figure increased.

LonRes said: “Looking ahead the recovery in under offer volumes and reports of continued demand for prime homes all bodes well for the market over the coming months.

“However, a sustained housing recovery will be reliant upon how the wider UK economy fares over the coming months and how fast an economic recovery we’re likely to see over the long-term.”

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