"Market activity remained resilient throughout the spring months, supported by strong nominal wage growth and some evidence of an improvement in confidence about the economic outlook."
- Amanda Bryden - Halifax
The latest Halifax data has revealed that average UK house prices remained stable during May, down by 0.1% from the previous month with the price of a typical home now standing at £288,688 (compared to £288,862 in April)
The annual rate of house price growth saw a small increase to +1.5% during the month, up from +1.1% in April.
National and regional figures
The North West is the strongest performing nation or region in the UK, where house prices grew by 3.8% on an annual basis in May. The average price of a property in the North West now stands at £232,258.
Northern Ireland's housing market remains strong, with growth up +3.2% in May, pulling back slightly from +3.3% in April.
House prices in Scotland also increased, with a typical property now costing £204,952, +1.9% more than the year before. In Wales, house prices grew annually by +0.7% to £219,483 (vs +1.1% in April).
Eastern England recorded the largest decline in annual growth across the UK. House prices here now average £329,853, down -0.8% in May.
As you would expect, London continues to have the most expensive average price tag, now at £536,821, up marginally (+0.2%) compared to last year.
Amanda Bryden, Head of Mortgages, Halifax, said: “UK house prices were largely static in May, edging down slightly by -0.1% or around £170 in cash terms.
"On an annual basis, house prices rose for a sixth consecutive month, up by +1.5% vs +1.1% in April. The average property price now stands at £288,688.
“Market activity remained resilient throughout the spring months, supported by strong nominal wage growth and some evidence of an improvement in confidence about the economic outlook.
"This has been reflected in a broadly stable picture in terms of property price movements, with the average cost of a property little changed over the last three months.
“A period of relative stability in both house prices and interest rates should give a degree of confidence to both buyers and sellers. While homebuyers and those remortgaging will continue to respond to changes in borrowing costs, set against a backdrop of a limited supply of available properties, the market is unlikely to see huge fluctuations in the near term.”
Nathan Emerson CEO at Propertymark comments: “The housing market seems to be generally moving in the right direction, with house prices going up annually from this time last year.
"With a general election now on the horizon, there may be potential caution from buyers and sellers, especially those hoping to step onto the housing ladder for the first time, as they await any announcements regarding government support. People will also be carefully awaiting the Bank of England’s next announcement this month.”
Tomer Aboody, director of property lender MT Finance, says: “Buyer and seller confidence appears steady, with inflation moving in the right direction and the likelihood of an interest rate cut on the horizon.
“Stock levels have picked up as one would expect at this time of year which is helping keep prices in check but more volume is needed and would-be sellers encouraged to move, as even when interest rates start edging down, affordability will still be an issue for many.
"Some assistance to encourage buyers and sellers would be helpful – whether in the form of reduced interest rates, more flexibility on mortgages or potentially some stamp duty reform once a new government is in situ."
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "Although largely reflecting activity from a few months ago at least, we expect this up a bit, down a bit, pattern in house prices to continue.
"In our offices, we have seen buyers and sellers gain confidence, not just from the strong employment figures but the expected southerly direction of travel for inflation and mortgage rates, which is outweighing uncertainty surrounding the election.
"In any event, most seem to see little discernible divergence in policy between the two main parties and view the outcome as a foregone conclusion."
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “With the ECB making its move first and cutting rates this week, all eyes are on the Bank of England to see whether it will do similar at its June meeting. However, the timing of the general election has somewhat dashed those hopes, with an August cut at the earliest seeming most likely.
“Swap rates sharply increased earlier this week but have settled down. Should that volatility dissipate and Swaps fall, lenders could return to the market with more attractive rates. In the meantime, a number of lenders are on withdrawal watch so borrowers who see a rate they like the look of would be wise to secure it to protect themselves from further price fluctuations in the short term.
“The housing market continues to demonstrate resilience as borrowers adjust to the loss of rock-bottom rates and get on with their moves. Mortgage approvals paint a rosier picture, rising year-on-year and are encouraging for the market as the year progresses."
