UK house price recovery at mercy of coronavirus, warns Halifax
House prices hit a fresh peak in February, according to Halifax, but the bank issued a warning about the potential impact of the coronavirus outbreak on the property market later in the year.
The UK’s biggest mortgage lender said prices rose by 0.3% in February to a new record of £240,677. The quarterly rate of house price inflation also rose to 2.9%.
Buyers now face prices that are on average £8,000 more than in September last year, when Brexit worries were fuelling a downturn in the market.
Halifax managing director Russell Galley said: “The UK housing market has remained steady heading into early spring. The sustained level of buyer and seller activity is strong compared to recent years, with positive employment conditions and a competitive mortgage market continuing to support demand.”
However, the February figures reflect property market activity before the coronavirus-inspired falls in stock market values and financial confidence.
Galley said: “Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continue to exert pressure on the economy and we wait to see how these will affect housing market sentiment later in the year.”
Estate agents reported that coronavirus fears are already hitting some sales. Lucy Pendleton of agents James Pendleton in London said: “Coronavirus impacted our business for the first time on Wednesday, stealing away a sale that was just days from exchanging.
“The buyer worked in the events industry which is being rocked by large numbers of cancellations. He was unfortunately one of the employees told his job was at risk, forcing him to pull out of the purchase completely. The hope is this will remain an isolated case but the impact of the virus will become clearer in March.”
Guy Harrington of real estate lender Glenhawk said that until coronavirus gripped the country, the property market had moved into bull market territory, with a rapid market recovery after the election.
“The question on everyone lips now will be whether the damage that coronavirus is doing to other parts of the economy seeps into the housing market, and if so, just how catastrophic will it be?”