Coronavirus worries could affect housing market

March 12, 2020 by Mark

House Prices

There has been a fall in the levels of house price growth during the past month, with observers indicating that concerns over the spread of the coronavirus might lead it to fall even further – particularly following yesterday’s decision to cut UK interest rates.

Data provided by the Halifax showed a 2.8% growth in the average price of houses in the UK for the year up to February, which marks a decline from the 4.1% growth for the start of 2020. That figure represented the highest level of house price growth in almost two years, with industry observers arguing that this high growth was caused by a post-election bounce.

There was a small rise of 0.3% in house prices from January to February, while the quarterly figure was 2.9% higher. However, many within the industry are expressing worries that the effects of the coronavirus on the economy will have a damaging impact on housing market confidence and prices.

Speaking to Mortgage Solutions, the Halifax managing director Russell Galley stated that the growth during February had been due to many of the same factors as that of the previous month, but went on to add that:

“Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continue to exert pressure on the economy and we wait to see how these will affect housing market sentiment later in the year.”

He concluded by saying that there are also positive signs, including continued strong competition within the mortgage sector.

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