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| UK house prices again up in May, says Nationwide | UK house prices again up in May, says Nationwide |
| (5 days later) | |
| House prices increased by 0.4% in May, according to figures from Britain's biggest building society, which said there are "reasons for optimism" that activity will continue to gain momentum. | House prices increased by 0.4% in May, according to figures from Britain's biggest building society, which said there are "reasons for optimism" that activity will continue to gain momentum. |
| Nationwide's latest house price index showed the average price of a UK home increased to £167,912 during the month, up 1.1% on May 2012's figure. | Nationwide's latest house price index showed the average price of a UK home increased to £167,912 during the month, up 1.1% on May 2012's figure. |
| That is the highest annual inflation figure recorded by the society since November 2011, and compares with a 0.7% year-on-year fall seen a year ago. | That is the highest annual inflation figure recorded by the society since November 2011, and compares with a 0.7% year-on-year fall seen a year ago. |
| The three-month on three-month figures, which offer a less volatile picture of the housing market than single monthly figures, were in positive territory for the eighth consecutive month and showed a rise of 0.4%. | The three-month on three-month figures, which offer a less volatile picture of the housing market than single monthly figures, were in positive territory for the eighth consecutive month and showed a rise of 0.4%. |
| The figures are the latest sign of life in the housing market, which has been gaining momentum since autumn when the government's plan to make more mortgages available through its funding for lending scheme started to filter through to buyers. | The figures are the latest sign of life in the housing market, which has been gaining momentum since autumn when the government's plan to make more mortgages available through its funding for lending scheme started to filter through to buyers. |
| Since then, it has announced the Help to Buy scheme for first-time buyers and movers with small deposits, and launched the first part, which provides equity loans to buyers of new-build properties. | Since then, it has announced the Help to Buy scheme for first-time buyers and movers with small deposits, and launched the first part, which provides equity loans to buyers of new-build properties. |
| Although transaction levels remain below historical norms, competition for homes has been increasing in some areas of the country, leading some commentators to warn Help to Buy risks fuelling a house price bubble. | Although transaction levels remain below historical norms, competition for homes has been increasing in some areas of the country, leading some commentators to warn Help to Buy risks fuelling a house price bubble. |
| "It's not just prices – a number of measures of housing market activity have also started to move higher," said Nationwide's chief economist, Robert Gardner. | "It's not just prices – a number of measures of housing market activity have also started to move higher," said Nationwide's chief economist, Robert Gardner. |
| "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." | "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." |
| Gardner said that alongside cheaper mortgage deals, the improved outlook in the wider UK economy may be making homebuyers more optimistic. | Gardner said that alongside cheaper mortgage deals, the improved outlook in the wider UK economy may be making homebuyers more optimistic. |
| "Widespread expectations that the economy will continue to recover gradually in the quarters ahead, that interest rates will remain low, and the ongoing impact of policy measures aimed at supporting the availability and lowering the cost of credit all provide reasons for optimism that activity will continue to gain momentum in the quarters ahead," he said. | "Widespread expectations that the economy will continue to recover gradually in the quarters ahead, that interest rates will remain low, and the ongoing impact of policy measures aimed at supporting the availability and lowering the cost of credit all provide reasons for optimism that activity will continue to gain momentum in the quarters ahead," he said. |
| However, he said there were factors that could drive prices down, including a slowdown in employment growth and pressure on household budgets from inflation. | However, he said there were factors that could drive prices down, including a slowdown in employment growth and pressure on household budgets from inflation. |
| "In real terms [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," Gardner added. | "In real terms [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," Gardner added. |
| Ben Thompson, managing director of Legal & General Mortgage Club, said the figures were painting "an increasingly optimistic picture", but that pace of growth in the housing market was split across the UK. | Ben Thompson, managing director of Legal & General Mortgage Club, said the figures were painting "an increasingly optimistic picture", but that pace of growth in the housing market was split across the UK. |
| "Clearly London and the south-east is driving a great deal of momentum. While fears of a bubble in the housing market persist they are largely unfounded, as in other areas in the UK such as Nottingham sentiment is not universally positive, thus making the picture patchier," he said. | "Clearly London and the south-east is driving a great deal of momentum. While fears of a bubble in the housing market persist they are largely unfounded, as in other areas in the UK such as Nottingham sentiment is not universally positive, thus making the picture patchier," he said. |
| "As it stands house prices are only inflated in the capital and elsewhere in the country it could be argued that additional stimulus is still needed to get us fully on the road to recovery." | "As it stands house prices are only inflated in the capital and elsewhere in the country it could be argued that additional stimulus is still needed to get us fully on the road to recovery." |
| But Matthew Pointon, property economist at Capital Economics, said he believed much of the optimism about a housing market recovery "is misplaced". | But Matthew Pointon, property economist at Capital Economics, said he believed much of the optimism about a housing market recovery "is misplaced". |
| "The rise in housing market optimism could help prices to make further gains over the coming year, but confidence is fragile and it could easily evaporate," he said. | "The rise in housing market optimism could help prices to make further gains over the coming year, but confidence is fragile and it could easily evaporate," he said. |
| Top mortgages | Top mortgages |
| Chelsea Building Society | Chelsea Building Society |
| Chelsea Building Society | Chelsea Building Society |
| Woolwich (Barclays) | |
| Provided by London & Country for the Guardian | Provided by London & Country for the Guardian |