Inflation-adjusted house prices were up by 0.75% y-o-y in Q1 2020
The UK’s housing market is gradually improving. Real house prices rose by 0.75% during the year to Q1 2020, an improvement from the previous year’s 1.36% decline and its best performance since Q1 2017. Quarter-on-quarter, real house prices increased slightly by 0.83% during the latest quarter.
Wales was the best performing region during the year to Q1 2020, with real house prices rising by 4.62%, followed by Yorkshire and the Humber (2.59%) and North West (2.42%). London real house prices fell by 0.65%.
Demand continues to fall
Nationwide residential property transactions of £40,000 or above fell sharply by 15.4% to 291,050 units in the first four months of 2020, amidst the coronavirus outbreak, according to the HM Revenue & Customs. Though even before the pandemic, demand has already been weak, falling by 1.2% in 2019 and 2.3% in 2018, due to volatile political and economic environment surrounding the Brexit deal.
Rents, rental yields: London yields are poor, at around 2.6%
London apartment costs are very expensive, at €18,057 per sq.m.
| UK: typical city centre apartment buying price, monthly rent (120 sq. m) | |||
| Buying price | Rate per month | Yield | |
| London (Prime Central | $2,166,840 | $4,715 | 2.61% |
Recent news. The UK’s real GDP shrank by 2% quarter-on-quarter in Q1 2020, the biggest decline since Q4 2008, according to the Office for National Statistics (ONS). The second quarter is expected to be much worse - the Bank of England (BoE) projects that the UK economy will shrink by a huge 14% this year, the biggest annual contraction since a decline of 15% in 1706.
In May 2020, the BoE kept its key rate unchanged at its record low of 0.1% and held its quantitative easing program at £200 billion, in an effort to limit the impact of the coronavirus pandemic.
On January 31, 2020, the UK officially left the European Union (EU), after a referendum vote less than four years earlier. Though, the country continues with its current trading arrangements until the end of 2020.