Month-on-month there was a 1.4% fall in house prices in June, which comes following May’s 1.7% decrease.

And, Nationwide’s latest House Price Index revealed, on a seasonally-adjusted basis prices were 3.7% lower in June than they were in April.

Robert Gardner, Nationwide’s chief economist, explained this was the first time annual house price growth had been in negative territory since December 2012.

But, he said, this negative annual growth came as no surprise in light of the fact housing market activity had slowed ‘sharply’ as a result of the pandemic and lockdown measures.

“It is unsurprising that annual house price growth has stalled, given the magnitude of the shock to the economy as a result of the pandemic,” he said.

“Economic output fell by an unprecedented 25% over the course of March and April – almost four times more than during the entire financial crisis.”

Hel also took into account mortgage activity which he said experienced an even more dramatic slowdown with only 9,300 approvals for house purchase in May, down from 73,700 in February and 86% lower than in May 2019.

Uncertain market

While some in the industry were optimistic the situation might improve over the next months as more lockdown restrictions were lifted, others were more cautious.

Guy Harrington, CEO of residential lender Glenhawk said: “The Covid-19 pandemic has well and truly brought the UK housing market to its knees.

“We are in the midst of an unprecedented economic crisis, with consumer confidence at rock bottom.

“The raft of government measures designed to keep us afloat, coupled with undoubted pent up demand and longer term sectoral tailwinds, may support a V-shaped recovery, but the near-term outlook is highly uncertain.”

Meanwhile, Andrew Montlake, managing director of mortgage broker, Coreco, said:  “The June house price data is bad, perhaps very bad, but it was always on the cards.

“The property market was never going to get through such a profound economic shock without taking a material hit.”

Resetting the market

But those working in the property sector took a slightly different take. Jonathan Hopper, CEO of Garrington Property Finders said the figures should be taken ‘with a healthy pinch of salt’.

“At the half-way point of 2020, the average property in the UK is now worth just a touch less than what it was a year ago,” he said. “So far this is a hard reset for the market rather than a collapse.

And Lucy Pendleton, a property expert at James Pendleton estate agents, thought the market had come off well considering the circumstances.

She said: “Prices are down by a whisker annually but what is remarkable is how soft a landing the market has had given the scale of the disaster that has unfolded in the past few months.

“Nationwide’s reading of the situation is totally in line with recent indications that the prices being achieved on the doorstep have slipped to 2% or 3% below asking prices on average.

“June was the first full month of trading since the property market came back to life post-lockdown and these sellers will be those highly motivated to move through necessity. That pool of vendors will shrink rapidly and that could put a floor under prices.”