House prices saw strongest growth in three years before the Coronavirus pandemic

The latest Nationwide Building Society House Price Index shows that before the social distancing measures were introduced to fight the Coronavirus pandemic, the housing market had seen its strongest growth in three years.

According to the House Price Index, during April, house prices increased by 3.7% annually, which was its strongest growth since February 2017, when the annual increase was 4.5%, and the average house price during the month was £222,915. Commenting on these figures, Robert Gardner, chief executive at Nationwide, said: “It’s important to note that the impact of the pandemic is not fully captured in this month’s figures. This is because our index is constructed using mortgage approval data, and there is a lag between mortgage applications being submitted and approved.”

Gardner also highlighted the fact that the Coronavirus pandemic has had a huge impact on the housing market since social distancing measures were introduced. He added: “In the opening months of 2020, before the pandemic struck the UK, the housing market had been steadily gathering momentum. Activity levels and price growth were edging up thanks to continued robust labour market conditions, low borrowing costs and a more stable political backdrop following the general election.

“But housing market activity is now grinding to a halt as a result of the measures implemented to control the spread of the virus, and where the Government has recommended not entering into housing transactions during this period.

“Indeed, a lack of transactions will make gauging house price trends difficult in the coming months. Our ability to produce the index in the months ahead will depend on there being sufficient transactions which are representative of the wider housing market.

“The medium-term outlook for the housing market is also highly uncertain, where much will depend on the performance of the wider economy.”