House prices showed some signs of recovery in May, following significant falls the previous month, according to the latest house price index from the Halifax.
On a monthly basis, prices increased by 1.5 per cent in May, partially reversing the 3.1 per cent decline recorded in April.
On an annual basis, prices were 1.9 per cent higher in the three months to May than the same period a year earlier.
But the quarterly figures show that the housing market has remained stagnant for much of 2018, with just a 0.2 per cent rise in house prices when compared to the previous quarter.
All these figures are on a seasonally adjusted basis.
According to the Halifax this means that the average house in the UK is now priced at £224,439.
Halifax’s managing director Russell Galley says: “These latest price changes reflect a relatively subdued UK housing market. After a sharp rise in January mortgage approvals have softened in the past three months.”
However, he says both newly agreed sales and new buyer enquiries are showing signs of stabilisation having fallen in recent months.
Galley adds that the continuing strength of the labour market is supporting house prices. Falling inflation and rising wages, coupled with low interest rates were “further underpinning prices” he says.
Former RICS chairman and North London estate agent Jeremy Leaf says: “At first glance these figures look disappointing with Halifax reporting annual house price growth softening in May.
“Once again we are seeing the rather topsy-turvy pattern to the housing market – up one month, down the next. Looking forward we expect more of the same and possibly slightly better as we await figures reflecting the crucial spring market period.”
Octane Capital’s chief executive Jonathan Samuels adds: “May’s 1.5 per cent price rise following April’s sharp decline shouldn’t be mistaken for renewed energy in the housing market. The quarterly growth figure is a far more accurate gauge of conditions and that’s as good as flat. The market is ticking over, but is listless at best.”
He adds: “The sheer lack of stock will prevent prices from going into freefall, but there is a lot of caution in the market at present and it could be premature to write off inflation. Properties will sell if they’re priced correctly but will languish on the market indefinitely if not. Prospective buyers out there are not prepared to be overexposed.”