Blend Network has said that the full impact of the lockdown on the UK housing market will not become apparent for a few more months.
The peer-to-peer lender’s property market monitor for June cited data from the Nationwide House Price Index which shows that annual house price growth dropped to 1.8 per cent in May, down from a nearly three-year high of 3.7 per cent reached in April.
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Blend Network said although monthly price growth was negative, annual growth remains positive and relatively strong compared to the trend seen over the past five years. The platform also pointed out that the housing market was in a good place prior to the pandemic.
In the first five months of 2020, before the coronavirus struck, the market had been steadily gathering very strong momentum with a 0.9 per cent month-on-month house price rise in April, making it the strongest monthly growth since May 2015.
The platform said the impact of the slowdown on the data tends to show with a lag due to the way the Nationwide House Price Index is constructed. This is because it uses mortgage approval data, and there is a delay between mortgage applications being submitted and approved.
“Therefore, we believe that the impact of the pandemic in the housing data will continue to be seen in the June data,” Blend Network said in a blog on its website.
“The medium-term outlook for the UK housing market remains highly uncertain at this point and dependent on the wider economic performance.
“We are likely to see the full impact of the lockdown over the next few months as housing market activity effectively ground to a halt in April as a result of the measures implemented to control the spread of the virus.”
Last month Blend Network funded its second-ever largest loan, despite the economic uncertainty caused by the Covid-19 pandemic.
114 investors funded a £700,000 loan for the redevelopment of a Stafford-based office building into an apartment complex, the first tranche of a £1,950,000 total loan facility.