House prices rose by 0.5 per cent month-on-month from £236,712 in April and by 5.2 per cent from £224,925 in May 2018, the lender’s latest house price index found.
In the latest quarter from March to May, house prices were 2.5 per cent higher than in the preceding three months, it added.
Russell Galley, managing director at Halifax (pictured), said that despite the ongoing political and economic uncertainty, underlying conditions in the broader economy continue to underpin the housing market, particularly the twin factors of high employment and low interest rates.
He added: “This is supported by industry-wide figures which suggest no real change in the number of homes being sold month to month, while Bank of England data shows the number of mortgages being approved rose by almost 6 per cent in April, reversing the softness seen in the previous month.
“While current conditions may help those looking to make their first move onto the property ladder, existing homeowners will doubtless be considering long-term house price growth which continues to look subdued in comparison to recent years.
“Looking ahead, we expect the current trend of stability based on high employment and low interest rates to persist over the coming months, though clearly any downturn in the wider economy would be keenly felt in the housing market.”
Signs of recovery and confidence
Tomer Aboody, director of property lender MT Finance, said with an annual rise in values based on the same period last year, along with a steady increase in transactions, the housing market is continuing to show signs both of recovery and confidence.
He added: “Buyers have come to the conclusion that enough is enough, and the uncertain conditions which have been facing them could carry on for a while still, so that shouldn’t hold them back from getting on the ladder or moving up or down it.
“Fewer homes are on the market since sellers feel that they either don’t have to sell when values are still down on 2016 or with the stamp duty levels being so high they can’t afford the step up so are staying put for now. We don’t see this changing anytime soon.”
House price stability with strong economy
Mike Scott, chief property analyst at Yopa, said: “While the index is mix-adjusted to prevent regional imbalances from affecting the national figure, the Halifax’s mortgage book has always been concentrated in the northern part of the country, and their index may reflect the faster-growing prices in the north compared with stationary or falling prices in the south and London.
“However, while their reported rate of house price growth may be on the high side, we agree with the Halifax’s view that house prices will remain broadly stable as long as the economy remains strong, with no sustained price downturn likely unless unemployment rates or interest rates rise, or mortgage lenders reduce the amounts that they are prepared to lend.”