Latest House Price Index Figures from Nationwide – Industry Reacts
The average price of a UK home rose to £242,832 in May, up from £238,831 the previous month, according to the latest figures in Nationwide’s latest House Price Index.
The statistics showed a slight slowdown in the pace of growth, with a monthly change of 1.8 per cent, down from 2.3 per cent between March and April. However, the annual change this month stands at 10.9 per cent, up from 7.1 per cent four weeks previously.
Robert Gardner, chief economist for Nationwide, said: “The market has seen a complete turnaround over the past twelve months. A year ago, activity collapsed in the wake of the first lockdown with housing transactions falling to a record low of 42,000 in April 2020. But activity surged towards the end of last year and into 2021, reaching a record high of 183,000 in March.”
He added: “While March’s spike in transactions was driven by the original end date of the stamp duty holiday, a lot of momentum has been maintained. Our research indicates that the extension to the stamp duty holiday is not the key factor, though it is clearly impacting the timing of transactions.”
There was much commentary within the industry on the figures. Miles Robinson, head of mortgages at Trussle, said that it was ‘positive’ to see continued buoyancy in the property market.
He added: “However, with the average asking price of homes in the UK reaching a significant £242,832 in May, many might be thinking whether now is the right time to buy. There’s a possibility that the upcoming stamp duty holiday deadline is creating a false economy of bidding wars, with house prices inflating beyond their original value. This is putting buyers at risk of lenders down valuing during the mortgage process and even if applications are successful, homeowners could find themselves in negative equity later down the line.”
Others were far more critical. These included Guy Harrington, CEO of Glenhawk. He said: “The disconnect between the UK housing market and economic reality appears as great as ever. Government stimulus has created a false sense of consumer confidence. Whilst the fundamental driver of a supply demand imbalance will persist indefinitely, against a backdrop of rampant inflation and a potential third wave, the pace of growth has to slow.”