House price growth slowed to 0.6% in May, the sixth month in a row that annual house price growth was below 1%. Month on month, sold prices were down 0.2% (source: Nationwide), although, looking further forward, according to Rightmove, asking prices were up 0.9%.
Overall, the market continues to be subdued, although there are some quite wide regional variations. In four of Rightmove’s eleven regions, prices hit record highs. The top performer was Wales, where average property prices broke the £200,000 barrier for the first time and annual growth hit 4.1%.
Next were the West and East Midlands, where prices were up 3.0% and 2.5%, respectively, and in the North West prices rose by 2.1%. In contrast, in the South, prices are struggling. In Greater London, asking prices have fallen by 2.5% over the last year, although they put in a strong performance in May, rising by 1.2%. In the Southeast, prices also came down annually (-1.1%) but, like London, rose in May, up by 0.6%.
Robert Gardner, Nationwide’s Chief Economist, said:
“Survey data suggests that new buyer enquiries and consumer confidence have remained subdued in recent months. Nevertheless, indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable.”
Considering the uncertain political backdrop, the ongoing resilience of the market is impressive. It’s no doubt being helped by the recent wage growth and rising employment levels. It will be interesting to see, once a new Conservative leader is chosen, whether it will improve consumer confidence and what kind of knock-on effect it might have on the housing market. We may, however, have to wait until the next Brexit deadline in October, at the earliest, before we see any real changes in market sentiment.
What is also impressive is the continuing growth of the first-time buyer market. Their numbers reached 395,000 in the twelve months to March – just 10% below their 2006 peak. It’s a trend that is likely to continue, too, as mortgages for those with smaller deposits have recently been falling.
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