House prices slip in May in subdued market

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In May, house prices fell by 0.2 percent compared with April, as the German construction company reported.

The lender said “uncertainty” would burden the market in the coming weeks.

Compared with the previous year, house prices rose by 0.6 percent-slower than in the previous month.

House prices

The annual price growth of the house is according to data from nationwide for six weeks under 1%.

“The survey data indicates that new buyer requests and consumer confidence have remained subdued in recent months,” said Robert Gardner, chief economist at Nationwide.

“Nevertheless, indicators of housing market activity have remained, such as the number of real estate transactions and the number of approved mortgages for house purchase, largely stable.

The number of first-time buyers has continued to recover. According to national data, there were 359,000 first-time buyers in the 12 months to March, just under 10% less than in 2006.

“Even if house prices remain high in relation to average income, the cost of maintaining the typical mortgage as a share of take-home salary in most parts of the country remained close to or below the long-term average,” Gardner said.

Die nationwide said that almost half of first-time buyers had received help from friends and family to raise a Deposit to buy a house.

Samuel Gräber, chief economist at Pantheon Macroeconomics, said that the Brexit uncertainty “probably triggered some caution among buyers”.

But he also expects a” modest ” improvement later in the year, as consumer confidence has recovered and mortgage transactions for buyers with smaller deposits have been better.
Brexit-Effects

The Bank of England’s data, also published on Friday, showed that mortgage approvals reached a three-month high of 66,261 in April, after falling to a 15-month low of 62,599 in March.

Howard Archer, chief economic adviser of the EY Element Club of forecasters, said:”the significant increase in mortgage approvals in April suggests that housing market activity was supported at least temporarily by avoiding a disruptive Brexit at the end of March”.

He said, however, that Brexit uncertainty could hinder the housing market later this year.