UK house prices stabilise as rising wages and consumer confidence steady market | House prices

UK house prices held steady in May underpinned by rising wages and an increase in economic confidence during the important spring selling season, according to the latest data from mortgage lender Halifax.

Average house prices were stable in May, dipping 0.1% on a monthly basis. The typical UK home now costs £288,688 – reduced slightly from £288,862 in April, according to Halifax’s index . On an annual basis, prices were up by 1.5% in May and up from 1.1% in April.

The strongest performing area in the UK was the north-west of England, where house prices grew by 3.8% on an annual basis in May and the average price of a property in the region stands at £232,258. Northern Ireland also continued to show strong growth, up by 3.2% in May.

The latest data adds to growing signs that the housing market remains robust despite the Bank of England’s decision not to cut interest rates so far this year. There was an rise in mortgage lending rates in the first quarter of the year that slowed the housing market.

Amanda Bryden, the head of mortgages at Halifax, said: “Market activity remained resilient throughout the spring months, supported by strong nominal wage growth and some evidence of an improvement in confidence about the economic outlook. This has been reflected in a broadly stable picture in terms of property price movements, with the average cost of a property little changed over the last three months.”

She added that, given the backdrop of a limited supply of available properties, “the market is unlikely to see huge fluctuations in the near term”.

In an upbeat trading statement, Bellway, the housebuilder, said its performance during the spring selling season remained “robust” with a rise in private reservations as it remained on track to deliver 7,500 homes for the year ended 31 July 2024.

“Customer demand has benefited from an improvement in affordability, driven by a moderation of both mortgage interest rates and consumer price inflation and an increase in wages,” the housebuilder said in a trading update.

Bellway also added that it had upped its expectations for its overall average selling price to £305,000 from previous guidance of £295,000 because of changes in its product mix.

Labour has said that, if it wins the general election, it will make permanent a mortgage guarantee scheme aimed at helping low-deposit mortgages become available for first-time buyers.

The temporary scheme, which involves the government acting as a guarantor for part of a home loan, was introduced by the Conservatives in 2021 and was extended until July next year by the chancellor, Jeremy Hunt. It is aimed at encouraging lenders to offer low-deposit deals to first-time buyers.

Labour believes its plan, which will be rebranded “Freedom to buy”, will help 80,000 young people buy their own homes over the next five years.