Annual UK house price growth was marginally stronger in May at 3.5%, compared with 3.4% in April says Nationwide.
House prices rose by 0.5% month on month, after taking account of seasonal effects.
Robert Gardner, Nationwide’s chief economist, comments: “Official data confirmed that there was a significant jump in residential property transactions in March, with buyers bringing forward their purchases to avoid additional stamp duty costs.
“Owner occupier house purchase completions were around twice as high as usual and the highest since June 2021 (which was also impacted by stamp duty changes).
“Nevertheless, mortgage approvals data suggests that market activity appears to be holding up well following the end of the stamp duty holiday.
“Despite wider economic uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive.
“Unemployment remains low, earnings are rising at a healthy pace (even after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we, and most other analysts, expect.”
Jonathan Hopper, chief executive of Garrington Property Finders, says: “While the national averages look comfortably upbeat, they mask some huge regional variations.
“In parts of London and much of southern England, the supply of homes for sale is now far outstripping demand. This is especially true in more expensive, and often highly desirable, areas where the trickle of supply has turned into a flood.
“In these areas, buyers find themselves blessed with plenty of choice and the leverage to negotiate on price. This is keeping prices flat or even nudging them down.
“At the other end of the scale, demand is often exceeding supply in areas seen as representing strong value – and this is driving prices up rapidly in much of northern England.”
And Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “The historically-accurate Nationwide house price index was one of the first to reflect the change in market dynamics since the stamp duty holiday ended in March.
“But now it is showing that activity has settled since that time with the significant increase in supply, which now comfortably exceeds demand, keeping prices in check. Underlying confidence too has not disappeared as these latest figures evidence.
“Buyers and sellers are coming to terms with the ‘new normal’ as employment strength outweighs economic worries and doing their best to keep deals alive.”
Tom Bill, head of UK residential research at Knight Frank, is slightly more cautious and adds: “Concerns around inflation and the government’s financial headroom mean mortgage rates don’t feel poised to drop meaningfully. Buyers also have a lot of properties to choose from this spring, which we expect to keep downwards pressure on prices in the short term.”
This article is taken from Landlord Today