House prices saw a surprise 0.4% rise in May with annual growth picking up to 1.3% from 0.6% in April, the Nationwide House Price Index revealed today.
Robert Gardner, Nationwide’s Chief Economist, says: “UK house prices increased by 0.4% in May, after taking account of seasonal effects. This resulted in a slight pickup in the annual rate of house price growth to 1.3% in April, from 0.6% the previous month.
Robert Gardner, Nationwide“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.
“Consumer confidence has improved noticeably over the last few months, supported by solid wage gains and lower inflation.”
Matt Thompson, head of sales at Chestertons, says: “Some house hunters waited for the Bank of England to cut interest rates earlier this month but as this did not happen, buyers quickly resumed their search.
Matt Thompson, Chestertons“Although the announcement of the General Election caught most people by surprise, it was positive news and caused minimum disruption to the property market at the time – particularly in London where demand continues to outstrip supply.
“We expect the increased certainty of the political landscape to support confidence in the market and encourage more house hunters to make decision. We therefore expect buyer demand to remain strong throughout the summer.”
Nicky Stevenson, Managing Director at national estate agent group Fine & Country, says: “House prices had been yo-yoing from economic gales, but May’s figures indicate calmer waters ahead for the housing market.
Nicky Stevenson, Fine & Country“Previously hesitant home buyers are feeling more confident to pull the trigger on moving plans as financial strains ease.
“With inflation moving closer to the government’s 2% target and potential interest rate cuts this summer, demand may surge further into 2024. This will help to stabilise or even nudge prices upwards amid buyer competition – a positive development for sellers.
“Lenders are also lowering rates in response to more favourable conditions, making homeownership more attainable, especially for first-time buyers previously deterred by high monthly payments or excessively long mortgage terms.
“If current trends persist, the UK housing market could experience a steady rebound, with prices rising moderately in popular areas and hot markets. However, affordability concerns may linger.”
Guy Gittens, FoxtonsFoxtons Chief Executive Guy Gittins, adds: “Mortgage approvals have been climbing consistently throughout the year and despite last week’s news of a general election we saw weekly new applicant enquiry numbers hit a five year high, demonstrating just how much buyer confidence has grown in 2024.
“Not only has there been an uplift in buyer activity, but we’re also seeing more sellers return to the fold in order to take advantage of this growing market momentum with the number of offers being accepted at its highest since 2016.
“This positive start to the year has come despite interest rates remaining at 5.25% and as market sentiment has improved, this has naturally led to a greater degree of positive property price growth.
“Going forward, we don’t anticipate that the impending general election will dampen this growing market sentiment and we expect further growth will materialise over the summer months as the market continues to heat up, particularly with the possibility of an interest rate cut firmly on the horizon.”
Tom Bill, Knight FrankTom Bill, head of UK residential research at Knight Frank, says: “House prices do not feel poised to rally, despite a seasonal increase in demand. High supply is keeping a lid on prices and stubborn services inflation means swap rates are rising and mortgages starting with a ‘3’ feel some way off.
“Asking prices still need to reflect the fact that buyers currently have tighter budgets and more choice. The general election is unlikely to impact mainstream property markets and if buyers want to know what prices will do next, the next inflation reading rather than the political manifestoes is the best place to start.”
Jeremy LeafJeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Despite not including the increasingly high proportion of cash sales, this historically reliable house price indicator confirms what we are seeing in our offices – buyers and sellers are shrugging off possible uncertainty arising from the forthcoming election and concentrating more on probable near-term falls in inflation and interest rates.
Nathan Emerson, Propertymark“The increase in property choice is not having a significant impact on values or stopping some hard negotiations on both sides. Appropriately-priced property is still generating considerable interest and offers.”
And Nathan Emerson, Chief Executive of Propertymark, says: “The housing sector has seen a strong start to the year and it’s positive to see further momentum.
“We are conscious there may be a potential slow down across the summer as a knock-on effect following the general election, but with inflation firmly on its journey downward and with scope for interest rate cuts, we may soon see a much welcome influx of highly competitive deals from lenders hit the marketplace.”
