House prices fell for the third consecutive month in May, according to Halifax, as the coronavirus lockdown continues to notably affect the housing market.
The average price of a house is now £237,808, which dropped 0.2% in May (£506), following dips of 0.6% in April and 0.3% in March.
Experts have predicted overall price drops of between 3% and 30% (a worst case scenario) through the year, as the full effects of Covid-19 takes its toll on the economy.
Halifax’s forecast is less severe than Nationwide’s house price index, released earlier this month, which reported that prices have plummeted at the fastest rate since the financial crisis in 2009.
In fact, Halifax’s data suggests that market activity could actually be poised to pick up. May’s house prices are 2.6% higher than in the same period in 2019.
Russell Galley, managing director at Halifax, 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.”
Hard to Predict
Experts still believe that the housing market is difficult to predict, especially as the full impact of the lockdown measures on the property market, and the economy, are not yet fully known.
Galley adds: “It should still be noted that with a limited number of transactions available, calculating average house prices remains challenging and increased volatility is to be expected.
“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.”
Changing consumer behaviour could also be influential. Nationwide’s findings earlier this month revealed that potential buyers are now planning to wait six months on average before entering the housing market, and that 12% had put off moving homes because of the lockdown.
Ross Counsell, director at Good Move, said: “Consumer behaviour will undoubtedly change. For example, sellers will start to accept lower offers on their properties, whilst buyers will begin to consider other things when buying a new home, for example, space in the household and outdoors will be a necessity.”