House prices dip in May

Annual house price growth slowed to 0.6% in May to leave the average price of a home in the UK at £214,946, according to the Nationwide Building Society.

May was the sixth month in a row that the year-on-year price comparison saw a decline.

Month-on-month prices fell 0.2% after taking account of seasonal factors.

The Nationwide said its survey data suggested that new buyer enquiries and consumer confidence had remained subdued in recent months, but indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, had remained broadly stable.

Although low borrowing costs were helping a number of purchasers, saving for a deposit was still proving onerous, the group said.

While Help to Buy was assisting many first-time buyers, the Nationwide said that without the scheme it would take someone in London setting aside 15% of their take home pay each month more than 15 years to save a 20% deposit to buy a typical first-time buyer property.

Even in Scotland and the North, where the Nationwide said property was most affordable, it would still take someone earning the average wage and saving 15% of their take home pay each month more than five years to fund such a deposit.

Robert Gardner, the Nationwide’s chief economist, said: “Housing market trends are likely to continue to mirror developments in the broader economy.

“While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity, with price growth and transaction levels remaining close to current levels over the coming months.”