The coronavirus outbreak is set to bring UK house prices to a “juddering halt” in the coming months, a top economist warned today.
UK house prices fell 1.1 per cent between December and January. But they were 1.3 per cent up on the previous year, data released today showed.
The Office for National Statistics said UK house prices increased 1.3 per cent over the year to January. That was down from 1.7 per cent growth in December.
Average UK house prices increased 1.1 per cent over the year in England to £247,000. In Wales they rose two per cent to £162,000. And they were 1.6 per cent up in Scotland to £152,000, and 2.5 per cent higher in Northern Ireland to £140,000.
London house prices grew 1.4 per cent over the year.
Howard Archer, chief economic adviser to the EY Item Club, said the data showed the housing market was in a relatively good place following December’s election.
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But he warned said coronavirus was likely to stop growth in its tracks.
“The late-2019, early-2020 upturn in the housing market looks certain to be brought to a juddering halt by the impact of coronavirus on the economy,” he said.
Miles Robinson, head of mortgages at online mortgage broker Trussle, added the coronavirus outbreak will deal a blow to UK house prices.
“We can’t ignore the elephant in the room,” he said. “Pressure is mounting on the economy as the coronavirus outbreak escalates. As it stands, we’re yet to see its full impact on the housing market.
“With more stringent government guidelines now in place… sellers may see a drop in property viewings for at least three weeks.
“Many existing homeowners will have been financially affected by the outbreak. The chancellor’s announcement to freeze mortgage repayments will help to reassure those who are worried about their ability to make their monthly payments.”
Archer said data from other sources such as the Bank of England and a survey from Halifax showed the UK housing market was in good shape before the crisis hit.
The Halifax survey showed a 2.9 per cent increase in UK house prices in the three months to February.
The RICS survey said: “Although near term sales expectations remain positive, optimism has moderated somewhat, with anecdotal evidence suggesting concerns over the economic impact of the coronavirus are weighing on the outlook to some extent.”
Rightmove has in the last week reported a “significant” slowing in property sales.