UK house prices return to growth in May - Nationwide
UK house prices returned to growth in May after two months of declines, according to data released by Nationwide on Friday.
House prices were up 0.4% on the month following a drop of 0.4% in April and 0.2% in March. Economists had expected house prices to tick up 0.1% on the month.
On the year, prices rose 1.3% in May following a 0.6% jump in April and a 1.6% increase in March.
The average price of a home now stands at £264,249, up from £261,962.
Nationwide chief economist Robert Gardner said: "The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer term interest rates in recent months."
Andrew Wishart, senior UK economist at Capital Economics, said that despite a small increase in the Nationwide house price index in May, the big picture is that the slight rise in mortgage rates since the start of the year has caused house prices to stagnate.
"Taking a step back, house prices have been flat for a year and a half, with the slight increase in May leaving them in line with their January 2023 level," he said.
"In the near term, house prices will stagnate at best. Delayed expectations of Bank Rate cuts in recent weeks will maintain the upward pressure on mortgage rates, while the RICS survey suggests that the supply of homes on the market is increasing, consistent with modest house price falls over the next few months.
"But if we are right to think inflation will fall below target by year end and that Bank Rate will be cut to 3.00% next year, the resulting drop in mortgage rates should give prices renewed impetus next year. Following a 2% increase this year, we expect house prices to increase by 5% in 2025."