According to the report from Nationwide Building Society, UK house price growth slows sharply as the impact of the pandemic begins to filter through

Annual house price growth slows to 1.8% from 3.7% in April. Economists had expected a 2.8% increase. Prices down 1.7% month on-month, after taking account of seasonal factors.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “UK house prices fell by 1.7% over the month in May, after taking account of seasonal effects – this is the largest monthly fall since February 2009. As a result, the annual rate of house price growth slowed to 1.8%, from 3.7% in April. In the opening months of 2020, before the pandemic struck the UK, the housing market had been steadily gathering momentum. Activity levels and price growth were edging up thanks to continued robust labour market conditions, low borrowing costs and a more stable political backdrop following the general election. But housing market activity has slowed sharply as a result of the measures implemented to control the spread of the virus. Indeed, data from HMRC showed that residential property transactions were down 53% in April compared with the same month in 2019. Mortgage activity has also declined sharply. Nevertheless, our ability to generate the house price index has not been impacted to date, as sample sizes have remained sufficiently large (and representative) to generate robust results. Low transaction levels may still make gauging price trends difficult in the coming months – especially for regional indices, which by their nature have lower sample sizes.