Annual property price growth in the UK slowed to 4.6% in May, down from 5.2% in April, according to the latest Nationwide house price index.
House prices increased by an average of 0.3% last month, compared to a 1% rise in April. The average property price was £195,166 in May, up from £193,048 in the previous month.
Chief Economist at Nationwide, Robert Gardner, forecasts house price growth to reflect income increases, which is currently around 4%.
He says: “The annual pace of house price growth slowed to 4.6% in May. This resumes the gradual downward trend that had been in evidence since the summer of 2014, which was briefly interrupted in April when house price growth edged up to 5.2% from 5.1% in March.
“Over the longer term, we would expect house price growth to converge with earnings growth, which has typically been around 4% per annum.
“However, much will depend on supply side developments; in recent years, the rate of building activity has remained well below that required to keep up with population growth.”1
1 http://www.propertyflock.co.uk/f/8416B41FC