House prices creep up despite Nationwide claiming the market is slowing

House prices crept up to £213,618 on average in May as market activity continued to drag, Nationwide claims.

The May Nationwide House Price Index shows prices were up 0.29% on a monthly basis and up 4.5% annually.

Despite this, Nationwide used seasonally adjusted figures to show annual price growth slowed from 2.6% to 2.4% between April and May.

Robert Gardner, chief economist for Nationwide, said: “Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent.

“Looking further ahead, much will depend on how broader economic conditions  evolve, especially in the labour market, but also with respect to interest rates.

“Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low.

“Overall, we continue to expect house prices to rise by around 1% over the course of 2018.”

Commenting on the figures, Lucy Pendleton, founder director of estate agents James Pendleton, said: “For all the concerns about purchasing power, consumer confidence and interest rate hikes, another month has brought with it yet another record high.

“This just goes to demonstrate the energetic effect that a nationwide scarcity of properties can have on prices. Subdued new buyer enquiries are being offset by the fact that those who are entering the market are competing for fewer homes.

“Despite the impression that there has been an exodus of landlords from the rental market over the last couple of years, their population is still robust, representing one in every five homes.

“On the ground we are not seeing landlords abandon the private rental market but shift their focus to smaller rentals, including those known as ‘pocket living’, which might be one-bed studio apartments.

“It is already the case that most flats are privately rented, so this suggests that is unlikely to change any time soon.

“A lingering concern in this market on the demand side is the ‘leg-up’ effect.

“First-time buyer demand has only recently crept back to pre-crisis levels and that’s only with a massive shot in the arm from Stamp Duty relief and Help to Buy.

“So far, 2018 has seen more price contractions than rises month-on-month. This could be a sign that this ‘leg-up effect’ is slowly beginning to wane. That would fit squarely with the fairly unexciting expectation of a 1% rise in prices throughout this year.”

* Meanwhile, data from the Bank of England showed mortgage lending slipped in April. The figures showed mortgage approvals for home purchase fell 0.55% to 62,455 in April, while remortgage approvals were down 1.55% to 46,189.

x

Email the story to a friend



Comments are closed.

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.