United Kingdom: Annual house price growth accelerates in April
According to the Nationwide Building Society, house prices in the United Kingdom rose 2.1% month-on-month in April, contrasting March’s 0.3% contraction. On an annual basis, house prices were up 7.1%, above March’s 5.7% increase. April’s acceleration likely reflected the extension of the stamp duty holiday until later in the year, as well as improved consumer sentiment as the country moved out of lockdown.
Looking ahead, the housing market should remain robust in the near term, supported by the extension of the stamp duty holiday beyond March, and a new mortgage guarantee scheme to provide mortgages with minimal down payments.
On the outlook, Robert Gardner, chief economist at Nationwide, commented:
“Housing market activity is likely to remain fairly buoyant over the next six months […] given continued low borrowing costs and with many people still motivated to move as a result of changing housing preferences in the wake of the pandemic. With the stock of homes on the market relatively constrained, there is scope for annual house price growth to accelerate further […]. Further ahead, the outlook for the market is far more uncertain. If unemployment rises sharply towards the end of the year as most analysts expect, there is scope for activity to slow, perhaps sharply.”