Housing prices in the UK in may as pressure on household budgets is growing

Housing prices fell in may, as a faltering economy, pressure on household budgets, prospects for interest rates, pursued the market.

Figures from nationwide prices fell 0.2% month-on-month, the third decline in four months. In annual terms, price growth slowed to 2.4% from 2.6% in April.

Robert Gardner, chief economist at the building society, said: “there are some signs of the upcoming changes. Surveyors continue to report subdued levels of new buyer inquiries, while the offer of the real estate market remains thinner than the torrent.

“Looking ahead, much will depend on the General economic situation to develop, especially in the labour market, but also in terms of interest rates.

“Subdued economic activity and continued pressure on household budgets is likely to continue to provide this year a modest drag on activity in the housing market and growth in property prices, although borrowing costs will probably remain low”.

The average house price was £213,618 in may when seasonally adjusted – up from € 213,000 in April.

The numbers across the country chime with the official data that indicates a slowdown in the market, driven by London.

The latest data from the office for National statistics shows that British housing prices fell in March, with the capital recording its weakest results since 2009.

Statistics body, the decline in London may be associated with changes to stamp duty, and quarter and month of voting, which discourages foreign buyers and has led to a reduction in net migration to the cities.

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Howard Archer, chief economic adviser to the ey club, said: “the housing market is clearly trying to gain momentum and we suspect that any significant growth will remain elusive in the coming months.

“Basics for buyers of homes is likely to remain challenging. Consumers are faced with an extended severe pressure on purchasing power, which only gradually dissipated.

“In addition, activity in the housing market still faces relatively fragile consumer confidence and the willingness of companies to participate in major transactions.”