UK house prices rose for the first time in five months in May as buyers were spurred on by a shortage of homes and low mortgage rates.
The average price increased by 0.4% last month to £220,706, according to Halifax. It was the first monthly rise in house prices since the beginning of 2017 and surprised City economists, who had forecast a 0.1% fall.
House prices went up in May despite uncertainty surrounding the upcoming Brexit negotiations and general election, and a tougher outlook for household finances, which are being squeezed as inflation outpaces wage growth.
Martin Ellis, a housing economist at Halifax, said Britain’s property shortage was a key factor underpinning prices.
“The fact that the supply of new homes and existing properties available for sale remains low, combined with historically low mortgage rates and a high employment rate, is likely to support house price levels over the coming months,” he said.
However, the longer-term trend was weaker, with the annual growth rate in house prices the slowest in four years at 3.3%, and sharply lower than the recent peak of 10% in March 2016. Prices fell by 0.2% over the past three months.
via The Guardian