Nationwide Building Society Continues To Back Strong Housing Market Rebound

As we reported, in their March House Price Index Report the Nationwide Building Society took what many property pundits thought was a rather over-optimistic view that there could be a positive rebound in the housing market post lockdown. In this weeks report for April, they have continued to support the idea of a rebound, and this view is now beginning to receive more credence and backing by many in the property industry.

Taking into account the news this week from Rightmove that some 90% of agents expect their existing pipeline of sales will complete as social and business restrictions are eased, there is a growing weight of opinion building that whilst somewhat battered and bruised with some repairs needed, the UK housing market could prove to be more robust than expected and successfully ride out the economic storm brought about by the lockdown to contain the Coronavirus.

The Nationwide Building Society's Chief Economist, Robert Gardner stated that annual house price growth increased to 3.7% in April, up from 3% in March - the fastest pace since February 2017 (when annual growth was 4.5%). They had seen month-on-month house price gains for the last seven months in a row, after taking account of seasonal effects. 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. However, this all came to a very dramatic and abrupt halt as the lockdown was introduced, stifling the UK's economy.

Robert comments, “Economic activity is set to contract significantly in the near term as a direct result of the necessary measures adopted to suppress the spread of the virus. “But the raft of policies adopted to support the economy, including to protect businesses and jobs, to support peoples’ incomes and keep borrowing costs down, should set the stage for a rebound once the shock passes, and help limit long-term damage to the economy. “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.

Estate agent and former RICS residential chairman Jeremy Leaf, remarked about the report that, “Although these widely-respected and otherwise promising figures may be regarded as meaningless, bearing in mind they reflect much of the beginning of the lockdown period, they could yet have more significance. “For if, as we are finding, that most transactions have been put on hold rather than cancelled, then most could be reinstated if restrictions are eased soon and economic damage is relatively limited.”

Download the Nationwide Building Society report above.

The Robert Bell & Company Team

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