The UK housing market remains subdued, however, house prices in the three months to May were 1.9 per cent higher than the same period a year earlier, according to survey by UK bank Halifax.
On a monthly basis, prices rose by 1.5 per cent in May, partially reversing the 3.1 per cent decline in April.
Halifax’ April housing Index showed that house prices fell over three per cent, following a 1.6 per cent rise in March.
However, the May figures represent something of a slow down from the 2.2 per cent annual growth seen in April, while still being 0.2 per cent higher than in the preceding three months.
The average house price in the UK is now £224,439, Halifax said.
Russell Galley, managing director at Halifax, said: “These latest price changes reflect a relatively subdued UK housing market.
“After a sharp rise in January, mortgage approvals have softened in the past three months, whilst both newly agreed sales and new buyer enquiries are showing signs of stabilisation having fallen in recent months.
“The continuing strength of the labour market is supporting house prices. With interest rates still very low we see mortgage affordability at very manageable levels providing a further underpinning to prices.”
Howard Archer, chief economic adviser at the EY ITEM Club said: “The ongoing softness in house prices comes amid still lacklustre housing market activity.
“The further dip in mortgage approvals in April – albeit slight – looks particularly disappointing given housing market activity that they had likely been adversely affected in March by the severe weather.
“April’s mortgage performance indicates that housing market activity remains muted as it pressurized by still limited consumer purchasing power, fragile confidence and likely further gradual Bank of England interest rate rises following November’s first hike since 2007.”
However, Jeremy Leaf, north London estate agent and a former RICS residential chairman, was somewhat more positive on the Halifax numbers: “At first glance, these figures look disappointing with Halifax reporting annual house price growth softening in May.
“Once again we are seeing the rather topsy turvy pattern to the housing market – up one month, down the next. It is the same on the ground – no real pattern, with buyers and sellers negotiating hard but not always successfully.
“Looking forward, we expect more of the same and possibly slightly better as we await figures reflecting the crucial spring market period.’
Source: City A.M.