UNITED KINGDOM — UK house prices decreased by 0.1 percent in May to an average of £298,806, representing the first monthly decline of the year. This decrease was reported by Nationwide.
The average price of a typical home saw monthly decreases of 0.1 percent in April and 0.5 percent in March. Despite the monthly fall, house prices increased by 0.5 percent year-on-year in May, which was up from 0.4 percent in April. Economists had forecast a 0.1 percent monthly increase in house prices for May, and analysts expected annual house price growth of 1 percent for the same month.
Amanda Bryden, head of mortgages, said: "Property price trends continue to reflect the uncertainty linked to developments in the Middle East. Despite recent cuts to mortgage rates, higher inflation expectations have kept borrowing costs above the level seen at the start of the year, continuing to stretch affordability for many buyers and temper demand." Bryden also stated: "House prices are expected to remain broadly stable in the coming months despite interest rates on mortgages remaining stubbornly high."
The average two-year fixed mortgage rate was 5.66 percent on Thursday, an increase from 4.83 percent at the start of March, according to Moneyfacts data. The average five-year fixed mortgage rate was 5.62 percent, rising from 4.95 percent. The lender reduced its annual house price growth forecast by 50 percent.
Inflation was 2.8 percent in April, marking the lowest rate in over a year. Additionally, the household energy price cap will increase by 13 percent to £1,850 per year in July.
Jason Tebb, president of a property company, said: "This is the strongest buyers’ market we have seen in many years, with plenty of stock to choose from." Tebb added: "Little movement in average house prices suggests buyers and sellers are adopting a pragmatic outlook and adjusting expectations rather than a loss of confidence." He also noted: "Steadier prices are better as far as those trying to get on the ladder for the first time are concerned, as there is less risk of being priced out further."