House prices rose by 0.5% this month, according to Halifax figures, while HMRC data shows that home sales remain steady.
The increase takes annual growth to 5.2%. Commenting on the figures, Russell Galley, managing director, Halifax, says: “We saw a slight increase in house prices between April and May, but the overall message is one of stability.
“Despite the ongoing political and economic uncertainty, underlying conditions in the broader economy continue to underpin the housing market, particularly the twin factors of high employment and low interest rates.”
Figures from HMRC also show that home sales remain steady. Some 99,240 homes sold in April – only slightly below the five-year average of 101,249. Mortgage approvals are increasing too, according to Bank of England figures, rising by 5.9% in April, taking the total number to 66,261 – just above the five-year average.
Marc von Grundherr, director of estate agency Benham and Reeves, was upbeat about the figures. “I think this week, in particular, we’ve been reminded that Brexit isn’t the be all and end all and this is a mentality that’s been returning to the UK housing market over the last few months.”
“All in all, we’re in a very good spot right now. High employment and steady wage growth are bringing an overarching air of stability to the market, subdued house price growth and low interest rates are giving first-time buyers an additional leg up.
“But we’ve also seen the largest rate of annual house price growth in the last year, which is positive for existing homeowners.”
Jonathan Hopper, managing director of Garrington Property Finders, took a similar view, suggesting “it’s starting to look like business as usual in the property market”.
He says: “With the number of mortgage approvals jumping to its highest level in two years and house prices continuing to rise at a respectable clip, it’s starting to look suspiciously like business as usual in the property market.
“The delayed spring bounce – which came after most activity was put on hold in the anxious weeks leading up to what should have been Brexit Day – has helped the market regain a cautious equilibrium.
“Sellers are finally being coaxed back to the market, albeit less by stabilising prices than by the solidifying of buyer demand.
“And pragmatic buyers who had held off are finally choosing to answer in the affirmative the nagging question of ‘if not now, when?’
Mr Galley adds: “Looking ahead, we expect the current trend of stability based on high employment and low interest rates to persist over the coming months, though clearly any downturn in the wider economy would be keenly felt in the housing market.”
This article was first published by our sister magazine Moneywise.