House Price Index May 2018

House Price Index: House prices up, market slowing

June 12th, 2018

Headlines

  • The Nationwide House Price Index for May shows that house prices have risen very slightly to £213,61
  • Seasonally adjusted figures show a slight reduction in house prices of 0.2 per cent.
  • Seasonally adjusted figures show that annual house price growth has slowed from 2.6 per cent to 2.4 per cent between April and May.

Commentary

Nationwide’s Chief Economist, Robert Gardner said: “UK annual house price growth slowed modestly in May to 2.4%, from 2.6% in April. House prices fell by 0.2% over the month, after taking account of seasonal factors. Annual house price growth has been confined to a fairly narrow range of c2-3% over the past 12 months, suggesting little change in the balance between demand and supply in the market over that period.”

Analysis

Whilst the headline housing figures show a mixed picture, in other news UK confidence in May took a positive step forwards. Despite UK consumers still holding a negative outlook, largely due to Brexit activity, the news may be enough for the Bank of England’s Monetary Policy Committee to consider a rate rise in the near future. Couple that consumer confidence news with figures showing that UK borrowing is increasing, and perhaps there will be enough positive market news for an interest rate rise.

Hiten Ganatra, Managing Director said: “The picture is mixed. The housing market in London is dragging the rest of the UK down, but the latest figures show that regional growth is strong and there is enough positive news in the economy for the Bank of England to consider a rate rise in the next couple of months.”