Latest data released by UK Nationwide Building Society - 31 July 2020
- Prior -1.4%
- House prices +1.5% vs -0.3% y/y expected
- Prior -0.1%
The data is released slightly earlier than scheduled. Housing market activity bounced back in July and that is a positive takeaway, though this largely comes off the back of the easing of lockdown restrictions across the country.
Nationwide also notes that the stamp duty holiday may help provide further support to the housing market in the near-term but there are still considerable risks:
"The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.
"The rebound in activity reflects a number of factors. Pent up demand is coming through, where decisions taken to move before lockdown are progressing.
"Behavioural shifts may be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown. Our own research, conducted in May (link), indicated that around 15% of people surveyed were considering moving as a result of life in lockdown.
"Moreover, social distancing does not appear to be having as much of a chilling effect as we might have feared, at least at this stage.
"These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward.
"However, there is a risk this proves to be something of a false dawn. Most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the aftereffects of the pandemic and as government support schemes wind down. If this comes to pass, it would likely dampen housing activity once again in the quarters ahead.
