Halifax has reported that house prices grew by 1.5% on a monthly basis, in contrast to a decline seen in April.
House prices in the three months to May were 1.9% higher than the same period a year earlier; experiencing slower growth than the 2.2% annual growth in April and 0.2% higher than in the preceding three months (December-February 2018).
The average house price is now £224,439.
Russell Galley, managing director at Halifax, said: “The month on month figures are more volatile than the quarterly or annual measures. In the three months to May house prices were 0.2% higher than the previous quarter and on an annual basis they are 1.9% higher. Both of these measures have fallen since reaching a recent peak, in the final months of last year.
“These latest price changes reflect a relatively subdued UK housing market. After a sharp rise in January, mortgage approvals have softened in the past three months, whilst both newly agreed sales and new buyer enquiries are showing signs of stabilisation having fallen in recent months.
“The continuing strength of the labour market is supporting house prices. In the three months to March the number of full-time employees increased by 202,000, the biggest rise in three years. We are also seeing pay growth edging up and consumer price inflation falling, and as a result the squeeze on real earnings has started to ease. With interest rates still very low we see mortgage affordability at very manageable levels providing a further underpinning to prices.”
Kevin Roberts, director of Legal & General Mortgage Club, added: “We’re continuing to see house prices rising at more sustainable levels than those of the past, which is good news for many buyers trying to get onto the property ladder. Younger buyers are also benefitting from growing support for schemes like shared ownership, which are putting them in a better position than a few years ago.
“However, this isn’t to say the housing crisis is over. One in every four housing transactions in this country are still supported by the Bank of Mum and Dad, a generous level of support, but what about those individuals who don’t have a ‘BoMaD’ to rely on?
“We firmly believe the answer for the challenges facing the housing sector is to build more homes. We are still not seeing enough new housing coming onto the market and a boost to housing supply – hundreds of thousands of new homes every year – will certainly provide younger buyers with a much better opportunity to take their first step as a homeowner.”