There’s a regular procession of house price indexes throughout the month and one, the Nationwide, reported this month as per our earlier piece.
It’s stable-mate, the Halifax Bank is also a reliable resource and published its numbers this morning. As with the Nationwide the Halifax stats are taken from mortgage applications made to each of these institutions and therefore represent fresh data whereas by contrast, the ONS/Hm Land Registry portrays a snapshot of completions derived from deals initially done several months ago.
The Halifax states that house prices dropped 0.6% in April compared to March but were still 2.7% up on this period last year. This compares favourably to the earlier Nationwide assessment on Tuesday that prices are 3.7% stronger year on year.
There’s a long way to go before we know what the effects of Covid will be on prices and so these relatively strong numbers so early on may well point downwards over the next month or two. That said, the Bank of England today stated that whilst GDP would fall 14% later this year, it would rally by 15% in 2021 representing a strong economic recovery much faster than the 2008/9 financial crisis. And unemployment expected not to take the big hit that might have been expected.
What does this mean? House prices in the short term may fade but in the medium to long term, the clever money is on buoyancy of values.