Nationwide: House Prices Begin to Rise Slightly

Nationwide House-Prices-Rise

The Nationwide Building Society has reported that UK house prices edged up 0.2% in May.

This meant the annual rate of house price growth was little changed at 4.7%, compared with 4.9% in April.

Robert Gardner, Nationwide’s chief economist, said: “The annual pace of house price growth remains in the fairly narrow range between 3% and 5% that has been prevailing for much of the past 12 months.

“In the near term, it’s going to be difficult to gauge the underlying strength of activity in the housing market due to the volatility generated by the stamp duty changes which took effect from 1 April.

“Indeed, the number of residential property transactions surged to an all-time high in March, some c11% higher than the pre-crisis peak as buyers of second homes sought to avoid the additional tax liabilities.

“While cash purchases accounted for a significant proportion of the increase in activity it is not possible to determine whether or not these were purchased by landlords. Mortgage data suggests that, while buy-to-let purchases were a major driver of the increase, the purchase of second homes also accounted for a substantial proportion. The number of home mover mortgages, which is where second home purchases with a mortgage would show up, increased sharply in March.”

Matt Andrews, managing director of Bluestone Mortgages, added: “As demand for homes continues to outstrip supply, it comes as no surprise that house prices are escalating. Consumer confidence is still rising, so with more people looking to secure lending for their dream property, it is vital that we see some innovation come into the sector to help more people get onto the housing ladder.

“In order to help those who currently struggle to gain access to lending, such as people who have experienced a genuine blip on their credit scores, or who only have limited trading histories, we need to offer a more in depth underwriting experience. This would ensure their specific circumstances are fully understood, and allow lenders to provide tailored and affordable mortgage options suited to their individual needs.”

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