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House prices hold up with 0.3% rise in May despite 0.7% year-on-year fall

House prices rose by 0.3% in May, but are still 0.7% lower than one year ago, the latest house price index from Nationwide shows.

A typical home is now valued at £166,022.

Robert Gardner, chief economist at Nationwide, says the fact that house prices had a modest increase in May demonstrates that they are holding up well against a flagging economy.

He says: “Even though the UK economy dipped back into recession in Q1, and showed few signs of a significant pickup in economic activity at the start of Q2, house prices were still up 0.3% in May.

“Demand for homes remains subdued on the back of weak labour market conditions, but the lack of homes coming on to the market is providing support for prices.”

He adds: “This is in part a reflection of the low rate of building in recent years which has failed to keep pace with household formation.”

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