The latest House Price Index from Halifax has revealed that house prices in the three months to May were 1.4% higher than in the preceding three months. This was slightly below April’s 1.5% and was the lowest since November 2015 (1.4%).
The figures also show that house prices in the three months to May 2016 were 9.2% higher than in the same three months of the previous year, which is unchanged from April.
“Low interest rates, increasing employment and rising real earnings, continue to support housing demand,” commented Martin Ellis, Halifax housing economist. “The strength of demand, combined with very low supply, is causing house prices to rise at a brisk pace in quarterly and annual terms.”
“Increasing affordability issues, caused by a sustained period of higher-than-earnings house price growth, should curb housing demand and result in some slowdown in house price growth as the year progresses,” he added.
The Index also revealed that home sales dropped substantially in April this year, with numbers falling by 45% from 153,700 in March to 84,300 in April.
In addition, housing supply remains very low, with new instructions by home sellers falling for the second consecutive month in April. This apparently contributed to a rise in the stock of homes available for sales as market conditions remain very tight.
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