The property market is showing signs of “resilience”, with prices rising slightly, according to new figures from the UK’s largest building society.
Nationwide said house prices rose 0.4% in May compared with April.
He said the average cost of a home was now £264,249 – with annual prices also increasing by 1.3%.
The numbers represent a recovery in monthly prices, after falling in the Nationwide index by -0.4% in April and -0.2% in March.
Other creditors have also reported modest declines in recent months.
Nationwide chief economist Robert Gardner said: “The market appears to be showing signs of resilience in the face of continued affordability pressures following long-term price rises interest rate in recent months.
“Consumer confidence has improved noticeably over recent months, supported by solid wage gains and lower inflation.”
He added that the next general elections it was unlikely to have a major impact on the market in the short term.
Gardner said previous national surveys “do not appear to have generated volatility in home prices or resulted in a significant change in home price trends.”
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This comes amid concerns about subdued demand in the housing market due to rising mortgage rates.
Inflation fell to 2.3% in April – the lowest level in almost three years.
However, the rate was higher than economists and the Bank of England had predicted – with analysts suggesting it could make an interest rate cut in June or August less likely.
‘Prices have stagnated, but will rise’
Nathan Emerson, chief executive of property agency Propertymark, said: “The property sector has had a strong start to the year and it is positive to see further momentum.
“We are aware that there may be a potential slowdown over the summer as a knock-on effect after the general election, but with inflation firmly on its downward path and scope for interest rate cuts, we could soon see an inflow very well -coming from highly competitive lender deals come to market.”
Andrew Wishart, senior economist at Capital Economics, said: “Taking a step back, house prices have remained stable for a year and a half, with the slight increase in May bringing them in line with the January level of 2023.
“In the short term, house prices will stagnate at best. Delayed expectations of bank rate cuts in recent weeks will maintain upward pressure on mortgage rates.”
He predicted house prices would rise 2% this year and 5% in 2025 after expected interest rate cuts.
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