In an uncertain world, one thing I think we can all be certain about is that there is likely to be a lot written and talked about UK house prices and valuations in the weeks and months ahead.
That’s completely understandable, especially how unique and damaging the Covid-19 pandemic has been, and that the lockdown led to almost a complete shutdown of the housing market.
Of course, where possible and through the use of AVM and desktop valuations, we as a sector were able to progress cases on lenders’ behalf during that period and, it also looks like a racing certainty, that such technology will be utilised even more in the future, particularly when we are certain of a more stable housing market.
In order to achieve that end we have some way to progress but, given we are now into the second month post-the easing of lockdown, we are growing that certainty day by day. Every inspection that our surveyors complete adds to the collective knowledge bank that can be drawn upon and should, as mentioned, give greater confidence to all those active within the sector.
Data is clearly valuable and vital – for example, we are just starting to see some early house price data from familiar sources, which are providing early indicators of just what the lockdown has meant for pricing, albeit I suspect based upon rather less transactions than these indices would normally analyse.
As per usual with these indices we do tend to get a differing picture depending on the source. Nationwide was first out of the blocks with its analysis for May which revealed that UK average house prices were down by 1.7% month-on-month, which meant annual growth dropped to 1.8%.
For the Halifax, it was a somewhat different picture, with prices showing just a 0.2% drop, meaning that annual pricing remained up at 2.6%. Halifax also provided a quarterly picture, and over the last three months this had meant a 0.5% fall in prices.
Now, a lot can be said and written about indices, but I think we’re all acutely aware that one swallow does not make a summer. This period has some way to run until we can see the true lay of the land in terms of pricing/valuations, and there is clearly some distance between the results of the Nationwide index and that of the Halifax.
Perhaps, unsurprisingly, housing market stocks took a rather sizeable jump off the back of the Halifax data, and this also coincided with Taylor Wimpey announcing that since it had reopened its sales offices, it had seen a three-fold increase in appointment bookings, plus a 32% increase in website traffic, compared to the same week last year.
Now, let’s be frank here, given the length of the lockdown, you would undoubtedly have expected a significant spike in interest after the measures were eased, but it is no doubt a positive, perhaps also signalling a level of strong pent-up demand and a willingness from the British public to engage again with the housing market.
The Halifax results are more positive of course, showing a much smaller drop than its lender peer, and given that some of the predictions around potential house price falls have been well into double-digits, then this level of fall was always going to be greeted positively. Let’s be honest, if house price falls are pitched at this level before returning to positive growth then the most pessimistic outlook will not come true.
But, as mentioned these are early days, and there is plenty more water to flow under the bridge before we can determine the true environment. However, overall, progress is being made – lockdown-based pipeline business is coming to an end and new business is being instructed and worked upon. Prices may see some fluctuations but this was always likely given the momentous times we are living through – our aim is to ensure we reflect the market as it is, not what it might have been or will be in the future.
Simon Jackson is managing director at SDL Surveying