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House prices slip in May in subdued market | House prices slip in May in subdued market |
(about 2 hours later) | |
House prices in May fell 0.2% from April in what Nationwide building society described as a subdued market. | House prices in May fell 0.2% from April in what Nationwide building society described as a subdued market. |
The lender said "uncertainty" was likely to weigh on the market in the coming months. | The lender said "uncertainty" was likely to weigh on the market in the coming months. |
Compared with a year earlier, house prices rose 0.6% - slower than the 0.9% rise the previous month. | Compared with a year earlier, house prices rose 0.6% - slower than the 0.9% rise the previous month. |
Annual house price growth has been below 1% for six months in a row, according to data compiled by Nationwide. | Annual house price growth has been below 1% for six months in a row, according to data compiled by Nationwide. |
"Survey data suggests that new buyer inquiries and consumer confidence have remained subdued in recent months," said Robert Gardner, chief economist at Nationwide. | "Survey data suggests that new buyer inquiries and consumer confidence have remained subdued in recent months," said Robert Gardner, chief economist at Nationwide. |
"Nevertheless, indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable. | "Nevertheless, indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable. |
"Housing market trends are likely to continue to mirror developments in the broader economy," he said. | "Housing market trends are likely to continue to mirror developments in the broader economy," he said. |
The number of first time buyers has continued to recover. According to Nationwide data there were 359,000 first-time buyers in the 12 months to March, just 10% below the 2006 peak. | The number of first time buyers has continued to recover. According to Nationwide data there were 359,000 first-time buyers in the 12 months to March, just 10% below the 2006 peak. |
"Even though house prices remain high relative to average incomes, the cost of servicing the typical mortgage as a share of take-home pay has remained close to or below long-run averages in most parts of the country," Mr Gardner said. | "Even though house prices remain high relative to average incomes, the cost of servicing the typical mortgage as a share of take-home pay has remained close to or below long-run averages in most parts of the country," Mr Gardner said. |
The Nationwide said that almost half of first-time buyers had received help from friends and family to raise a deposit to buy a home. | The Nationwide said that almost half of first-time buyers had received help from friends and family to raise a deposit to buy a home. |
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that Brexit uncertainty was likely to have "instilled some caution in buyers". | Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that Brexit uncertainty was likely to have "instilled some caution in buyers". |
But he also expects a "modest" improvement later in the year, as consumer confidence has been recovering and mortgage deals have been getting better for buyers with smaller deposits. | But he also expects a "modest" improvement later in the year, as consumer confidence has been recovering and mortgage deals have been getting better for buyers with smaller deposits. |
Brexit impact | |
Bank of England data also published on Friday showed that mortgage approvals reached a three-month high of 66,261 in April, after slipping to a 15-month low of 62,599 in March. | |
Howard Archer, chief economic adviser to the EY Item Club of forecasters said: "April's marked rise in mortgage approvals suggests that housing market activity may well have got at least some temporary support from the avoidance of a disruptive Brexit at the end of March". | |
However, he said Brexit uncertainty could hamper the housing market later this year. |