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UK Housing Market Shows Resilience as House Prices Increase

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    Modest Rebound for House Price Growth in May

    According to Nationwide’s latest House Price Index, there has been a modest rebound in house price growth in the UK property market which is proving itself to be even more resilient than expected.

    They found that UK house prices increased by 0.4% month-on-month in May. The annual growth rate has almost doubled compared to last month’s figure, up from 0.6% in April to 1.3% in May.

    The average house price now stands at £264,249, compared to £261,962 the month before.

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      Why Are House Prices Up Even in a Challenging Market?

      Despite challenges such as the cost of living crisis and high interest rates, the market is exhibiting signs of stability and resilience. Nationwide’s analysis posits a rise in consumer confidence thanks to wage growth and lower inflation, leading to increased activity.

      Robert Gardner, Nationwide’s Chief Economist, said: “UK house prices increased by 0.4% in May, after taking account of seasonal effects. This resulted in a slight pickup in the annual rate of house price growth to 1.3% in April, from 0.6% the previous month.

      “The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer-term interest rates in recent months. Consumer confidence has improved noticeably over the last few months, supported by solid wage gains and lower inflation.”

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      How Will the General Election Affect the Property Market?

      Nationwide also included some analysis of previous election period house price movements and market activity to gauge how much impact we can expect from the upcoming general election on 4th July.

      They found that typically general elections have not caused significant volatility or substantially changed trends in house prices. Generally, prices have stayed on their former trajectory, suggesting that wider economic trends are more likely to majorly influence housing prices compared to elections.

      Looking at mortgage approvals around historic polls also showed a similar picture. The charts show negligible impact in the three months before and after an election. The only exception is 2019 but this huge fall in approvals is down to the impact of the pandemic rather than due to the election, and activity returned to normal after restrictions began to be lifted.

      This implies that general elections don’t have a large effect on the decision-making of people who are buying or selling property.

      To read more about UK property powerhouse locations, take a look at some of our buy-to-let area guides covering topics such as available investment property in Chelmsford and available investment property in Dagenham.

      We have also published a new Property Investment guide along with a summary of what makes a good property investors in 2024.

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      Author

      Jessica Ferris

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      Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.

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