UK house prices rose slightly in May, as a squeeze in new properties on the market kept demand high, according to the Nationwide house price index.
The average price of a house rose 0.3% between April and May to £166,022 from £164,134, according to the Nationwide building society, which bases its figures on mortgage approvals made after surveys have been completed.
May's rise is the first since February, while over the 12 months since last May house prices are down 0.7%.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The Nationwide's Chief Economist, Robert Gardner, makes clear that: "demand for homes remains subdued on the back of weak labour market conditions, but the lack of homes coming onto the market is providing support for prices."
Gardner also notes how the lack of housing supply is also apparent in rising rents: "rental growth tends to track pay growth fairly closely over time. However, rental growth is now outpacing wage growth by a significant margin."
No one will be surprised to learn that in terms of affordability, London is still significantly more expensive than the rest of the country. The high property prices affect rents, with the average annual rent nearly 40% of the average salary in London, falling to nearer 20% in the north of England.
Rather conveniently, Nationwide has been collecting its data since 1952, when Queen Elizabeth ascended to the throne (although her coronation was in 1953). The lender makes the point that over the entirety of Elizabeth II's reign, house prices have risen 88 fold: 50 years ago the average price of a house was just £1,891.
BS
-
What happens if you can’t pay your tax bill, and what is "Time to Pay"?Millions are due to file their tax return this Friday as the self-assessment deadline closes. Though the nightmare is not over until you pay the taxman what you owe - or face a penalty. But what happens if you can't afford to pay HMRC your tax bill, and what is "Time to Pay"?
-
What does Rachel Reeves’s plan for growth mean for UK investors?Rachel Reeves says she is going “further and faster” to kickstart the UK economy, but investors are unlikely to be persuaded
