The Nationwide has reported a small rise in house prices during May and also over the past 12 months.
According to the Nationwide’s House Price Index, the value of the average home rose by 0.4% in May and was up 1.1% on the same time last year.
The UK’s largest building society also revealed the average house price in the UK now stands at £167,912; higher than the other two major house price surveys from the Halifax and the Land Registry.
As always though, the headlines mask a patchy regional picture, with seven UK regions experiencing price increases in the first quarter of 2013, whilst six saw prices fall.
Unsurprisingly, London is the best performing region of the UK, with a 4.6% rise over the past 12 months. At the other end of the scale Scotland was the worst performing area, with a drop of 4.9%.
Over the past three months though London has been knocked off the top spot, with house prices in Northern Ireland showing a positive change of 4.4%, compared to the capital which saw a rise of 2.8%.
Commenting on the figures, Robert Gardener, Chief Economist at the Nationwide, said: “House prices edged up by 0.4% in May, providing further support for the view that the housing market is gradually gaining momentum. The three month on three month measure of house prices, which is a smoother measure of the underlying trend, has been in positive territory since October last year. The annual rate of house price growth also ticked up to 1.1% in May, the fastest pace since November 2011.”
Many experts believe the housing market is now slowly regaining some of its’ lost momentum, spurred on by falling mortgage interest rates, a slight loosening of mortgage lending criteria, the economic recovery and a greater feeling of job security amongst homebuyers.
Robert Gardener again: “It’s not just prices, a number of measures of housing market activity have also started to move higher. In the first four months of 2013 the number of property transactions
was running at around 5% above the monthly average prevailing in 2012. The number of mortgage approvals for house purchase in the first quarter of 2013 was also around 4% above last year’s monthly average.”
Gardener continued: “However, progress is likely to be gradual and downside risks remain. While there are signs that economic activity is picking up, there has been some softening in the labour market, with employment growth appearing to run out of steam in the first quarter of the year.”
“Moreover, while inflation has fallen back in recent months, pressure on household budgets remains intense, as wage growth has also decelerated. Indeed, in real terms (i.e. after taking account of inflation) average weekly wages have been falling for some time and are now back at the level prevailing in late 2003”.