At £196,067, the average home price in May 2015 was a bit lower than in April but still surpassed the previous-year level, the latest Halifax House Price Index shows.
While there was a 0.1 per cent decline in comparison to a month ago, on an annual basis there was a 8.6 per cent increase, the latest figures show.
In a three-month comparison, from March to May were 2 per cent higher than in the period December 2014-February 2015. The quarterly rate fell for the second successive month to its lowest level since January. In March it was at 2.6 per cent.
Other indicators also point to a moderation on the market at present.
The latest HMRC data shows that home sales fell by 3.4 per cent on the month to 97,020. Sales in the three months from February to April were marginally higher (1.3 per cent) than in the preceding three months.
According to Bank of England’s latest report, the volume of mortgage approvals for house purchases – a leading indicator of completed house sales – increased by 9.9 per cent in April. However, whilst approvals in the three months to April were 6.6 per cent higher than in the period November 2014-January 2015, they were 4.3 per cent lower than in the same three months a year ago.
Commenting on the house price development, housing economist Martin Ellis, said:
“Annual house price growth (…) continues to be in the narrow range of 8-9% where it has been throughout 2015 so far.
“Housing supply remains extremely tight with the stock of properties available for sale currently at its lowest level for many years. At the same time, ongoing economic recovery, increasing employment, real earnings growth and very low mortgage rates are all supporting housing demand. This combination has kept annual house price inflation well above earnings growth although activity levels are subdued.
“The imbalance between supply and demand is likely to continue to push up house prices over the coming months. Looking further ahead, the increasing level of house prices in relation to earnings is expected to dampen house price growth.”
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