House prices rose 1.5 per cent in May, partially reversing a 3.1 per cent dip the month before, according to Halifax’s index. Prices were 1.9 per cent higher than a year earlier taking the national average to £224,439.
Russell Galley, managing director at Halifax, said growth had fallen back from a peak at the end of last year, with the latest figures reflecting “a relatively subdued UK housing market“.
The latest data comes after industry experts warned this week that concerns about Brexit could tip the London housing market into its first annual decline since the financial crisis in 2009.
Leading property industry figures predicted a 1 per cent fall in the capital and a 1.7 per cent rise for the UK as a whole - some way behind inflation, which was 2.5 per cent
Howard Archer, chief economic adviser at EY ITEM Club, said: “The housing market is struggling to gain traction amid challenging conditions and we suspect that any meaningful upturn will remain elusive over the coming months.
“We expect house price gains over 2018 will be limited to a modest 2 per cent. At this stage, we expect prices to rise no more than 3 per cent in 2019.”
Kevin Roberts, director of Legal & General’s Mortgage Club said the more sustainable rise in house prices was good news for buyers trying to get onto the property ladder.
“Younger buyers are also benefiting from growing support for schemes like shared ownership, which are putting them in a better position than a few years ago,” he said.
“However, this isn’t to say the housing crisis is over. One in every four housing transactions in this country are still supported by the Bank of Mum and Dad, a generous level of support, but what about those individuals who don’t have a ‘BoMaD’ to rely on?
“We firmly believe the answer for the challenges facing the housing sector is to build more homes. We are still not seeing enough new housing coming onto the market and a boost to housing supply – hundreds of thousands of new homes every year – will certainly provide younger buyers with a much better opportunity to take their first step as a homeowner.”
