House prices showed a slight bounce-back in May, following a decline the previous month, according to the latest house price index from the Halifax.
On a monthly basis, prices increased by 1.5% in May, partially reversing the 3.1% fall recorded in April.
On an annual basis, prices were 1.9% up in the three months to May than in the same period in 2017.
However, the quarterly figures show that the housing market has been stagnant for most of this year, with a mere 0.2% cent rise in house prices compared to the previous quarter (December to February).
According to the Halifax index this means that the average house in the UK now costs £224,439.
According to Halifax’s managing director Russell Galley, the latest price change reflects “a relatively subdued UK housing market. After a sharp rise in January mortgage approvals have softened in the past three months.”
The continuing strength of the labour market, he says, is supporting house prices. In the three months to March the number of full-time employees in the UK increased by 202,000, the biggest rise in three years.
“We are also seeing pay growth edging up and consumer price inflation falling, and as a result the squeeze on real earnings has started to ease. With interest rates still very low we see mortgage affordability at very manageable levels are further underpinning prices".
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