2020.06.0513:02:00UTC+00UK House Prices Fall For Third Month Amid Covid-19

UK house prices fell for a third successive month in May, though activity started picking up slightly, after the lockdown restrictions imposed to slow the spread of the coronavirus, or Covid-19, were partly eased.

The house price index decreased 0.2 percent after a 0.6 percent decline in April, monthly survey results from the Lloyds Bank subsidiary Halifax showed Friday.

Economists had forecast a 0.7 percent fall. In March, prices slid 0.3 percent. The house price inflation, which is the year-on-year change in the index, eased only slightly in May, from 2.7 percent to 2.6 percent. The average price of a house in May was GBP 237,808 versus GBP 238,314 in the previous month. In the March to May quarter, house prices dropped 0.5 percent from the previous three months ended February, when they rose 2.8 percent. The successive declines in house prices reflect a continued loss of momentum following what was a strong start to the year, Russell Galley, Halifax managing director, said. With a limited number of transactions available, calculating average house prices remains challenging and increased volatility is to be expected, he cautioned. Galley pointed out that the mid-month relaxation of restrictions in England that allowed estate agents and conveyancers to restart operations, brought much-needed positive news with some advance indicators of buyer and seller interest quickly showing signs of improvement. "This is likely to provide a short-term boost as buyers and homeowners attempt to kick-start transactions that had previously been put on hold," he said. "Looking ahead, we expect market activity to increase progressively as restrictions are eased further across the whole of the UK and we continue to have confidence in the underlying health of the housing market over the long-term." That said, the extent of downward pressure on market confidence and prices over the coming months will depend on how quickly the economy is able to recover from the effects of the pandemic and the available government policy support for jobs and households, Galley added.