UK house prices increased at the fastest pace since 2017 before the coronavirus pandemic struck the economy, data published by the Nationwide Building Society showed Friday.
House prices increased 3.7 percent on a yearly basis in April, faster than the 3 percent rise in March. The annual growth was forecast to ease to 2.5 percent. The latest increase was the strongest since February 2017.
The mortgage lender said the impact of the pandemic was not fully captured as the house price index was designed using mortgage approval data, and there is a lag between mortgage applications being submitted and approved.
Month-on-month, house prices grew unexpectedly by 0.7 percent after climbing 0.8 percent in the previous month. Prices were forecast to fall 0.3 percent.
Robert Gardner, Nationwide’s chief economist, said 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.
Lack of transactions will make gauging house price trends difficult in the months ahead, he noted.
According to Gardner, the medium-term outlook for the housing market is also highly uncertain.
Although economic activity is set to contract significantly in the near term, policies adopted to support the economy should set the stage for a rebound once the shock passes, he observed.
These same measures should also help ensure the impact on the housing market will ultimately be much less than would normally be associated with an economic shock of this magnitude, Gardner added.
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