Property Market Monitor: April 2020

Data from the Nationwide House Price Index shows that annual house price growth edged higher before the pandemic struck the UK. Indeed, UK house prices edged up by 3.0% year-on-year in March, after taking account of seasonal factors. This was the highest annual house price growth since January 2018 and the second highest growth since June 2017 (see Chart of the month). However, it is important to mention that the sample period excludes recent COVID-19 related disruption.

Quarterly data shows that in Q1 UK house prices saw year-on-year increases in every region except the north. Wales, with 6.4% year-on-year, saw the largest increase in Q1.

Chart of the month: The UK house price growth has continued its upwards trend in recent months

Source: Nationwide House Price Index

Market Commentary

• According to the Nationwide House Price Index, annual house price growth continued to edge up in March before the Covid19 pandemic struck the UK. Prices rose by 0.8% month-on-month in March, the strongest rate for 28 months and more than double the 0.3% month-on-month growth seen in the previous month. This marks the sixth consecutive month where prices rose month-on-month and is the longest period of sustained year-on-year price growth over the past five years.
• The quarterly data also shows that 2020 started on a strong note and that the UK housing market had steadily gathered momentum before the pandemic struck. UK house prices rose by 2.5% in Q1 compared with the same quarter last year and by 1.3% compared with Q4 2019.
• However, housing market activity is now grinding to a halt as a result of the measures implemented to control the spread of the virus. Nonetheless, the extent of such slowdown will become evident in the April data.

Figure 1: UK house price growth Q1 (YoY)

Source: Nationwide House Price Index

Figure 2: UK regional house price trends

Source: Nationwide House Price Index

At Blend Network, as mentioned by our CEO recently, we remain strongly committed to continue lending to experienced property developers who come to us with a solid project, an enviable track record and a strong exit strategy. Our underwriters are working very hard to ensure that our pipeline of loans remains of high quality so that we can keep bringing you great risk/reward loans as we have done so far. So, keep an eye for new loans coming at www.blendnetwork.com.