House prices in the UK have broken through their previous peak and the average cost of a home is now higher than ever before, according to the latest monthly survey by the country’s largest building society.
Nationwide reported a 13th consecutive month of house prices, bring the cost of an average UK home to £186,512 – more than the previous peak reached in October 2007 before the financial crisis took hold and the overall housing market started to go into freefall.
This is the first time that the index has returned to its peak since the crisis, and news that annual price inflation is now running at 11.1%, its highest level since June 2007, could fuel further calls for policymakers to step in to cool the market.
But at 0.7%, the monthly rate of inflation reported by Nationwide was lower than the 1.2% recorded in April. Also the building society’s three-month growth figure, which gives a less volatile picture of the market than month-on-month comparisons, also fell, from 2.5% in April to 2.3% in May. That brought it to the lowest level since August 2013.
The index is based on mortgages approved by Nationwide during the month, and recent lending data has suggested that the introduction of tough new mortgage rules in April led to a slowdown in the market.
Commentators have said it is too early to say if the reduction in activity is temporary or marks the beginning of a cooling off.
via The Guardian