House prices at record high

UK House prices recorded their thirteenth successive monthly increase in May rising by 0.7%, according to building society Nationwide.

House prices at record high

The average price for a home now stands at £186,512, up from the previous £183,577 recorded in April and more than the previous peak reached in October 2007.

The latest figures also show that UK prices are 11.1% higher than they were in May 2013.

Nationwide’s chief economist, Robert Gardner, said that there have been tentative signs that activity within the housing market maybe starting to moderate, stating that mortgage approvals in April are around 17% below January’s high.

He said: “It is too early to say whether nationally this is indicative of a cooling trend in the wider market. The slowdown may partly be the result of the introduction of Mortgage Market Review (MMR) measures, which may take a few months to bed down. The underlying pace of activity should become more evident as we move through the summer months and the impact of MMR becomes clearer.

“However, with mortgage rates close to all-time lows and labour market conditions continuing to improve, underlying demand for homes is likely to remain strong.”

The building society added that first-time buyers are playing an increasingly important role in the housing market recovery, but said the Help to Buy scheme is playing a supportive role rather than a starring one.

“Low mortgage rates and growing buyer confidence on the back of improving labour market conditions and the brighter economic outlook are probably playing a much greater role in stimulating buyer demand,” said Gardner.

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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