9:26 AM, 31st May 2024, About 7 months ago
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The UK’s house prices edged up in May after a brief period of decline, suggesting the market is weathering recent economic challenges, Nationwide reveals.
It says prices increased by 0.4% compared to April, following a 0.4% dip in April and a 0.2% decrease in March.
The annual growth rate for house prices also picked up in May, rising to 1.3% from 0.6% in April.
Nationwide has also analysed the potential impact of the upcoming General Election on the housing market and suggests that previous elections haven’t impacted house price trends or activity levels.
Robert Gardner, Nationwide’s chief economist, said: “The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer term interest rates in recent months.
“Consumer confidence has improved noticeably over the last few months, supported by solid wage gains and lower inflation.”
Nathan Emerson, Propertymark’s chief executive, said: “The housing sector has seen a strong start to the year and it’s positive to see further momentum.
“We are conscious there may be a potential slow down across the summer as a knock-on effect following the general election, but with inflation firmly on its journey downward and with scope for interest rate cuts, we may soon see a much welcome influx of highly competitive deals from lenders hit the marketplace.”
Chris Baguley, a director at Together, said: “While today’s price rises will add to greater confidence in the market, first time buyers and home movers still be cautious, preferring to hold out until mortgage rates begin to fall.
“The Bank of England held the base rate at 5.25% for the sixth consecutive time but there is optimism that a cut may come in the summer.
“This could spell great news for buyers as lower base rates will have a knock-on effect on the rate at which they can secure a mortgage.”
Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “Spring has come to the property market, with house prices skipping up to an average of £264,249 – the highest since October 2022.
“Consumer confidence has overcome the pressure of higher prices and mortgage rates, keeping buyers and sellers in the game.
“The general election is unlikely to upset the apple cart, so the limiting factor in the coming months is likely to be a glut of properties on the market.”
Nicky Stevenson, the managing director at Fine & Country, said: “House prices had been yo-yoing from economic gales, but May’s figures indicate calmer waters ahead for the housing market.
“Previously hesitant home buyers are feeling more confident to pull the trigger on moving plans as financial strains ease.
“With inflation moving closer to the government’s 2% target and potential interest rate cuts this summer, demand may surge further into 2024.
“This will help to stabilise or even nudge prices upwards amid buyer competition – a positive development for sellers.”
