UK house costs grew at a slower price in May in an indication that rising inflation and the squeeze on family budgets are cooling the property market.
The Nationwide House Price Index, printed on Wednesday, confirmed annual house price growth was 11.2 per cent in May, down from 12.1 per cent in April.
The modest slowdown is additional proof that steam might be popping out of the UK housing market, following two years of frenzied exercise fuelled by the stamp obligation vacation and way of life modifications in the course of the pandemic.
But whereas specialists anticipate the price of residing disaster might additional dampen transactions, they stated the figures additionally indicated the housing market remained buoyant.
Robert Gardner, chief economist at Nationwide, stated that whereas he anticipated the housing market to gradual “as the year progresses” it “retained a surprising amount of momentum” in May.
“Demand is being supported by strong labour market conditions, where the unemployment rate has fallen towards 50-year lows, and with the number of job vacancies at a record high,” he stated. “At the same time, the stock of homes on the market has remained low, keeping upward pressure on house prices.”
Double digit price rises in the course of the pandemic had exaggerated a decades-long development of property values outstripping inflation and wage growth, Nationwide added.
In 1952, the yr the Queen got here to the throne, the common house price was £1,891 – round £62,000 in at this time’s cash, and price 4 instances common earnings.
This means present common house costs are 4.3 instances increased than 1952 ranges in actual phrases.