House prices in England and Wales returned to annual growth with a 0.3% rise in May as foreign buyers returned to the property market and demand may be beginning to break through, according to a report released on Monday.
The Acadata house price index said prices grew on an annual basis for the first time since December as a favourable exchange rate and reduced prices have precipitated the return of foreign buyers, particularly in London where those from overseas were undeterred by a 0.2% annual drop in regional prices.
The report added that “there is some evidence that pent-up demand held back by events of the last few months is breaking through” despite the lack of progress in Westminster.
However, overall sales in the capital over the three month period ended May were 3% below the same period last year and 12% below the period in 2017 as prospective buyers and sellers in the Greater London region remain hesitant to take the plunge.
While record levels of employment, recent wage growth and strong competition in the mortgage market have offered some households more buying power, many potential buyers are still struggling to get a mortgage.
“In reality, the positive news on average earnings masks considerable divides – with younger and lower- and middle-income households not enjoying the same level of income inflation as those in higher wage brackets,” said the report.
Overall, average prices stood at £300,866 during the month, which constituted a 0.1% drop compared to the month before, as Wales, the North West of England and the East Midlands led annual growth with respective price increases of 3.1%, 2.5% and 1.5%.
By Duncan Ferris