I made my Times Radio debut this week! You can listen to it here – I come in around 10 minutes to the end.
I’m going to apologise now for the quality of the audio and my excessive umming – it was 5.45am and apparently my headset was not geared up for a live event.
Anyway, one of the things I talked about was house prices. I think house prices will keep going down until the end of the year because of coronavirus, general uncertainty and the end of the Brexit transition period.
Then it will begin to stabilise, or at least we’ll have a clearer picture of where it’s heading.
Of course, a day later, Nationwide came out with their July House Price Index and the headlines were all “prices are back up”.
Have I got it so terribly wrong? Maybe, maybe not.
House prices are up 1.7% in July compared to June according to Nationwide.
However, given that house prices were down by 1.6% in June compared to May, it’s basically a slight bounce back rather than full recovery.
Case in point, Nationwide’s chief economist Robert Gardner commented: “On a seasonally adjusted basis, house prices in July were 1.6% lower than in April.
“The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.”
He explained that this bounce back could be down to several factors, including pre-lockdown sales finally being able to exchange, more people looking to change lifestyles post-lockdown (eg move to the countryside) and social distancing measures not having as much of a dampening effect on the market as they thought.
While he thinks the upward trend will continue, it could turn out to be a “false dawn” as what’s happening in the jobs market could catch up later in the year.
Average house prices are up compared to last year, though – it’s £220,936 in July 2020 compared to £217,663 in July 2019, or an increase of 1.5%. But once you factor in inflation, the difference is negligible.
For the time being, it’s definitely a buyer’s market – ask for a big discount off the asking price if you are buying.
Obviously if you’re selling, things get a bit more complicated. You may still make a small profit depending on when you bought your property. And if you break even, you’ve basically been living rent free.
As for those whose homes are worth less than when they bought it, it’s worth taking a moment to think about why you’re selling and why you’re selling now.