UK house price growth slows to lowest rate in over a year
UK house price growth slowed in May, with the annual growth rate slowing to an annual rate of 4.6 per cent in May – down from 5.2 per cent in April and the lowest rate since August 2013.
The figures
The average cost of a house in the UK now stands at £195,166 – the highest level since records began. However, price growth is slowing, suggesting the rise between March and April was little more than a blip. This time last year prices were rising at 11 per cent – more than twice as fast as the current level of 4.6 per cent.
Read more: UK house prices: Mortgage approvals have their biggest spike since April 2009
Why it's interesting
Nowhere was the slowdown more significant than in London, where house price growth slowed from 17.8 per cent right down to 12.7 per cent – the seventh consecutive month of restrained growth.
What Nationwide said
Interestingly, the data suggests that the share of cash purchases in London is not out of line with the rest of the UK. On the surface, this may seem surprising, given the greater involvement of investors (domestic and overseas) in the London property market.A limiting factor may be that house prices in the capital are over twice as high as the rest of the UK (£408,780 versus £188,566 in Q1 2015 on our measure).
In short
UK house price growth have now slowed in seven of the last eight months – casting April's slight uptick as little more than an anomaly. Yet how long will that remain the case?
In the run-up to the General Election, the Tories pledged an expansion of the "right to buy" scheme – which is expected to put pressure on prices as more buyers are brought into the market. Not exactly helpful to squeezed first-time buyers.