House prices in the three months to May were 1.4 per cent more than in the preceding three months, but slightly below April’s 1.5 per cent and at the lowest level since November 2015.
Halifax’s latest index also showed prices in the three months to May were 9.2 per cent higher than in the same three months a year earlier and unchanged from April.
Prices increased by 0.6 per cent between April and May, a shift which largely offset April’s 0.8 per cent fall.
UK House prices | May 2016 (seasonally adjusted) |
Annual change | +9.2% |
Quarterly change | +1.4% |
Monthly change | +0.6% |
Average Price | £213,472 |
“The strength of demand, combined with very low supply, is causing house prices to rise at a brisk pace in quarterly and annual terms,” he stated.
“Increasing affordability issues, caused by a sustained period of higher-than-earnings house price growth, should curb housing demand and result in some slowdown in house price growth as the year progresses.”
Halifax noted that supply remains low, with the Royal Institute of Chartered Surveyors reporting new instructions by home sellers falling for the second consecutive month in April.
Jeremy Leaf, a former RICS chairman and north London estate agent, said it was encouraging for the longer-term health of the market that property prices have not dropped substantially following the introduction of the stamp duty surcharge for second homeowners at the beginning of April.
“But it is clear that house prices are being underpinned by a shortage of stock and substantial reduction in transaction volumes,” he added.
Legal & General Mortgage Club’s director Jeremy Duncombe pointed out that while some may view rising house prices as something to cheer about, the “relentless climb” is actually bad news for aspiring homeowners across the country.
He said: “The simple fact is that there is not enough housing stock to meet the rising demand for homeownership in the UK.
“The subsequent, consistent rises in the cost of property that these figures show are preventing many buyers from moving up the ladder, and potentially pricing out an entire generation of aspiring homeowners.”
peter.walker@ft.com
