It’s not difficult to look back to April time and do the rounds of many of the financial pages of the main tabloids or even broadsheets to find a doom and gloom prediction about house prices and price growth for 2020.
In something of a defence of those writers they can be forgiven for being more than a little spooked by the worst global pandemic in nearly a century followed by one of the worst recessions in living memory.
There has been talk of the potential for a V-shaped recovery since the beginning, but most daren’t hope too much given that much of the information and data being reported looked dire for the economy.
There were a few who had held hopes that despite these unprecedented events and situations that the market would remain robust and much of the economy that had been placed on hold would recover in time given that demand hadn’t evaporated, simply been placed on hold.
It seems that they may well have been right.
Record house prices
As reported by The BBC, Nationwide released data which suggested that August saw the biggest monthly rise in property prices for 16 years, rising by 2% to take the average house price in the UK to £224,123.
In the article it was reported The Nationwide had said the recovery in housing market activity had been “unexpectedly rapid”. It said “the increase in August was the highest since February 2004, when house prices rose by 2.7%. As a result, annual house price growth accelerated to 3.7%, from 1.5% in July”.
This does indeed represent a pretty impressive recovery of sorts. In some ways it doesn’t really fit the description of a recovery as it never really noticeably or drastically dropped over the same period.
The market was already doing extremely well up to the end of 2019, so it’s perhaps useful to think of this as something of a continuation of where the market left off rather than a recovery from a one-off position.
Record mortgage demand
Separately, The Guardian were also reporting that mortgage demand had rocketed, with new home loan approvals nearly doubling between June and July alone.
The report said that ‘With activity spurred by the release of pent-up demand and a stamp duty holiday included in the package of measures announced by the chancellor, Rishi Sunak, the Bank of England said mortgage approvals were running just 10% below their pre-crisis level.’
Few could have predicted such a swift and impressive recovery from more or less a standing start but such is the strength of the current UK property market it shook off some of the strictest public health measures ever enacted and a near total economic shut down to set new records almost immediately after lockdown was lifted.
If the virus can be controlled and restrictions kept to a minimum, then the expectation is that this run can continue well through to the end of the year and beyond, making it an ideal time for home buyers and investors.