LONDON (Reuters) – Britain’s housing market is grinding to a halt after the government’s shutdown of much of the economy, cutting short a nascent recovery that saw prices rise at their strongest pace in more than two years in March, mortgage lender Nationwide said.
Prices grew by 3.0% compared with March 2019, Nationwide said, their biggest rise since January 2018 and stronger than a median forecast for a 2.0% increase in a Reuters poll of economists.
“It is important to note that, while we use a full month’s worth of data to generate the index, the cut-off point is slightly before the end of the month,” said Robert Gardner, Nationwide’s chief economist.
“This means that developments following the UK government’s lockdown will not be reflected in these figures.”
As well ordering many companies to shut to slow the spread of coronavirus, the government has urged people to avoid moving house during the outbreak.
“A lack of transactions will make gauging house price trends difficult in the coming months,” Gardner said. “The medium-term outlook for the housing market is also highly uncertain, where much will depend on the performance of the wider economy.”
He said the government’s emergency measures to try to companies and jobs should lead to a strong rebound in the economy once the coronavirus shock passes.
“These same measures should also help ensure the impact on the housing market will ultimately be much less than would normally be associated with an economic shock of this magnitude,” Gardner said.
House prices in London rose by an annual 1% in the first quarter of 2020 after 10 consecutive quarters of falls, Nationwide said.