House prices: Up in May but still down on this time last year

27th May 2011

Would-be first-time buyers need not start crying into their coffee just yet, as The Guardian website reports that UK house prices rose very slightly by 0.3% in May but remained 1.2% down over the year.

The full report from the buildling society Nationwide can be downloaded from the website Housepricecrash.co.uk

The figures took house prices to an average of £167,208, compared with £165,609 in April.

The Telegraph reports that Nationwide believes prices will continue their sideways slide and "the modest improvement in economic conditions had so far been insufficient to pull the property market out of its "torpor", with household budgets remaining under pressure due to high debt levels and inflation rising at twice the pace of wage increases.

Back to The Guardian where Howard Archer from IHS Global Insight said "modest overall falls in house prices are more likely than not over the rest of 2011 and the first half of 2012".

"In fact, it needs to be borne in mind that house price indices are currently giving somewhat conflicting signals with latest data from the Halifax much weaker than the Nationwide, and showing prices falling by 1.4% month-on-month in April and down by 1.2% on a three-month-on-three-month basis.

"We suspect house prices will soften modestly overall through the rest of 2011 and the first half of 2012 as squeezed purchasing power, tightening fiscal policy and the prospect of gradually rising interest rates before the end of 2011 weigh down on potential buyers."

From This is Money, The Real Joe mocks:"Oh dear, the doomies ain't going to like this, their master plans dashed again. Curse that blasted low interest rate, they'd have gotten away with it if it was that pesky medling Merv. Scooby Dooby Doo!!"

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