May saw a slight slowing in the rate of annual house price growth to 11.2 per cent from 12.1 per cent in April, says the Nationwide.
Prices rose by 0.9 per cent month-on-month, after taking account of seasonal effects – the tenth successive monthly increase, which kept annual price growth in double digits.
“Despite growing headwinds from the squeeze on household budgets due to high inflation and a steady increase in borrowing costs, the housing market has retained a surprising amount of momentum” says Robert Gardner, chief economist at the Nationwide.
He explains that demand is being supported by strong labour market conditions, where the unemployment rate has fallen towards 50-year lows, and with the number of job vacancies at a record high. At the same time, the stock of homes on the market has remained low, keeping upward pressure on house prices.
He continues: “We continue to expect the housing market to slow as the year progresses. Household finances are likely to remain under pressure with inflation set to reach double digits in the coming quarters if global energy prices remain high.
“Measures of consumer confidence have already fallen towards record lows. Moreover, the Bank of England is widely expected to raise interest rates further, which will also exert a cooling impact on the market if this feeds through to mortgage rates.”
Gardner suggests that growing numbers of people are considering home improvements rather than moving.
“The most popular option for those looking to make improvements was to add or maximise space, with more than a third citing this as a motivating factor” he comments.
But almost as many - 29 per cent of those surveyed - wanted to improve energy efficiency or reduce the carbon footprint of their home.
This consideration has become increasingly relevant in light of surging energy costs, though decarbonising and adapting the housing stock is also important if the UK is to meet its 2050 emissions target
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But that's only keeping pace with true inflation, so it isn't an increase in the real world
Absolutely right Andrew - looking forward to a time when ‘experts’ can understand the difference between an increase, and keeping pace with inflation. We are not there yet.
Beer is going up faster than property currently, therefore I am getting poorer - enough to drive you to drink!
On average around 40,000 pints trapped in every property - but that number now seems to be going down as beer prices outstrip property prices - should have bought more beer when I had a chance!
PS - Andrew - What makes you think these guys live in the real world?
So True and your losing money in the banks, buy a house but don't bother with the tenants. If you want a peaceful life
Unfortunately the Council Tax will break the bank!
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