The latest figures from the two largest lenders in the UK have revealed that despite the predicted slowdown in the economy, house prices are still rising steadily.
The Halifax reported a 1.5% increase in prices in May, which is the fifth successive increase this year, up 4.2% in the last three months alone. However, the Nationwide reported a smaller rise of 0.8% in the last month ‘ which has nevertheless pushed house prices up by 5% since the start of the year.
Halifax said the seasonally adjusted average house price is now £90,707, and the annual rate of house price inflation has ratcheted up from 5.7% in April to 7.3% in May, which is the highest since last September.
The report from the Nationwide notes that its forecast of 7% for the annual rate of house price inflation remains on course, and puts the average house price at £87,267.
Alex Bannister, group economist at the Nationwide, said: ‘Although the economy is set to slow, we expect the recent pace of annual price growth to be maintained. With incomes rising we remain confident in our forecast of a 7% rise in prices this year.
‘The housing market has appeared relatively resilient against the recent slowing of the UK economy and mortgage rates should boost house buyers’ confidence. While there are economic risks, particularly from the US and the state of the equity markets, the housing market appears to be in a strong enough position to weather a mild storm.’