House prices rise in May

UK house prices rose 0.4% in May, while the annual growth rate picked up to 1.3%, from 0.6% in April, according to the Nationwide May House Price Index published this morning.

Ranald Mitchell, director at Charwin Private Clients said, “We’re not sure buyers are as resilient to affordability as the Nationwide suggests.

“There has been a surge in property listings, accompanied by an increase in viewings. However, many of these viewings are not yet translating into sales.

“The market is in danger of oversupply, shifting the balance in favour of buyers as it will present them with more options.

“Despite this advantage, buyers continue to face the challenge of high mortgage borrowing costs, which remains a significant consideration for many when deciding to move. The property market is on a knife edge.”

Ben Perks, managing director at Orchard Financial Advisers said, “Consumer confidence is definitely returning.

“Borrowers feel that better times are around the corner and that mortgage rates at the end of the year will have improved significantly. However, while we are seeing more enquiries, buyers are still a little stand-offish.

“Getting within 0.3% of the magical 2% inflation rate didn’t send mortgage rates tumbling as many hoped and there is still a lack of confidence in the market.

“The only thing standing in the way of better rates and a more active property market is the Bank of England. When that first rate cut comes, it could blow the doors off.”

Justin Moy, managing director at EHF Mortgages said, “Many people continue to approach us to assess their mortgage budgets, so demand is definitely there.

“The issue is price. What many prospective buyers are complaining about is vendors holding out for premium prices, even when properties have been on the market since the start of the year and have not sold.

“Stock levels are increasing but many properties are languishing on the market due to price and the refusal of sellers to budge.

“Buyers, understandably, just aren’t playing ball. The attractiveness of leasehold flats is again wavering, as buyers look to avoid issues with service charge costs.

“Houses in good condition, properly priced, and in popular areas continue to be sold in days, rather than weeks.”