House prices in the UK went up in May, bringing the average price of a property in the UK to £213,472, according to latest data from mortgage lender Halifax.
Prices increased last month by 0.6%, making up for the 0.8% dip in April. Quarterly house prices were up by 1.4% in the three months to May – down from 1.5% in April – which Martin Ellis, Halifax housing economist, says is a more reliable indicator of underlying trends.
Annual house price growth however, remains unchanged at 9.2% – the lowest rate since autumn 2015.
Halifax’s House Price Index comes in the wake of Nationwide Building Society’s latest house price index, which reported annual house price growth slowing in May to 4.7%, a month-on-month rise of 0.2% from April to May, and an average UK house price of £204,368.
House price slowdown predicted
Commenting on Halifax’s data, Mr Ellis says: “Low interest rates, increasing employment and rising real earnings, continue to support housing demand. The strength of demand, combined with very low supply, is causing house prices to rise at a brisk pace in quarterly terms.”
However, he predicts that prices could slow down later in the year. “Increasing affordability issues, caused by a sustained period of higher-than-earnings house price growth, should curb housing demand and result in some slow-down in house price growth as the year progresses,” he says.
The after-effects of the rush by buy-to-let landlords and second homeowners before April’s stamp duty hike are still evident: sales of homes in the UK fell by 45% from 153,700 in March – the highest monthly figure since records began in April 2005 – to 84,300 in April.
Commenting on the data, Jonathan Hopper, managing director of buying agent Garrington Property Finders, says: “A dip in demand from would-be buy-to-let landlords following the stamp duty hike had been expected, but the 45% slump in sales recorded in April shows just how acute the morning after effect was.
“Increasing numbers of vendors are now being forced to reassess their overly ambitious asking prices – shifting the power dynamic from a seller’s to a buyer’s market.”
Ian Thomas, co-founder and director of online property investment firm LendInvest, adds: “The resilience of house price growth is remarkable. Even now that the stamp duty stampede of the first quarter is behind us, and with the uncertainty of the EU referendum result dampening activity, house prices are still holding up.”
Property prices per square metre rise by up to 432%
In separate research, Halifax found that property prices per square metre have risen by 432% in Greater London against a national average increase of 251% over the past 20 years.
Mark Posniak, managing director at Dragonfly Property Finance, says: “For property prices per square metre in Greater London to have risen 432% compared to the national average of 251% over the past two decades once again underlines how, from a house price perspective, the capital is as good as a different country.”