LONDON- Britain’s house prices fell in annual terms for the first time since 2012 in June as the country reeled from the coronavirus shock to the economy, mortgage lender Nationwide said on Wednesday.
Nationwide said its measure of house prices fell by 0.1 percent compared with June of last year.
In monthly terms, prices fell by 1.4 percent, not as steep as May’s 1.7 percent fall, which was the biggest drop in more than 11 years.
A Reuters poll of economists had pointed to an annual rise of 1.0 percent and a monthly fall of 0.7 percent.
The government eased restrictions on the housing market in mid-May but data published by the Bank of England earlier this week showed the lowest number of mortgage approvals on record during that month.
Nationwide’s chief economist, Robert Gardner, said a further easing of broader lockdown measures in the coming weeks was likely to lead to a slight pick-up in activity in the housing market, but the medium-term outlook remained highly uncertain.
“The raft of policies adopted to support the economy, including to protect businesses and jobs, to support peoples’ incomes and keep borrowing costs down, should set the stage for a rebound once the shock passes, and help limit long-term damage to the economy,” he said.
Nationwide said on a seasonally adjusted basis, house prices in June were 3.2 percent lower than in April.
It said its sample sizes had remained sufficiently large to generate an accurate reading of price changes.
In London, house prices rose by an annual 2.1 percent over the second quarter and average prices in the capital were just 3 percent below all-time highs struck in early 2017.
A Reuters poll of property market analysts published last week showed prices in London were expected to fall 5.0 percent this year before rising 2.0 percent next year and 4.3 percent in 2022.
Prices in shops in Britain fell again in June as retailers tried to lure shoppers out of their coronavirus caution but the size of the drop was smaller than in May, an industry survey showed on Wednesday.
Shop prices fell by 1.6 percent in annual terms, following a 2.4 percent drop in May which was the biggest decline since at least 2006, said the British Retail Consortium trade body and market research firm Nielsen.
Food inflation held steady at 1.5 percent but non-food prices dropped by 3.4 percent.
“Consumers have benefited as shop prices have fallen for the 13th consecutive month.
However, the situation for many retailers, such as those in clothing and footwear, remains very challenging,” Helen Dickinson, the BRC’s chief executive, said.
Britain’s most closely watched inflation rate fell to 0.5 percent in May, its lowest in nearly four years. Bank of England Deputy Governor Ben Broadbent has said it could go below zero in the coming months. — Reuters
