UK house prices returned to growth in May amid signs of market “resilience” after two months of falls, according to a building society.
The average property price in Britain rose 0.4% month on month to £264,249, after a similar-sized fall of 0.4% in April, Nationwide said.
Robert Gardner, Nationwide’s chief economist, said: “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.”
The annual rate of growth more than doubled to 1.3% in May, from 0.6% in April.
It comes after slight increases in mortgage rates since the start of the year slowed the housing market through March and April.
According to Moneyfacts, at the end of January the average two-year fixed-rate mortgage cost 5.56%, rising to 5.92% by the end of May.
Experts think the Bank of England is likely to cut interest rates in August or September, while headline inflation eased to 2.3% in the 12 months to April 2024, down from 3.2% in the 12 months to March.
Gardner added: “Consumer confidence has improved noticeably over the last few months, supported by solid wage gains and lower inflation.”
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This week a separate index, by the property website Zoopla, showed that Britain’s supply of homes for sale was at its highest point in eight years, in a trend that experts said would limit house price rises for the rest of 2024.
Meanwhile, Nationwide research showed the upcoming general election was unlikely to have a significant impact on house prices. Previous polls have not affected underlying market trends, the research showed, as buyers sought to plough on with sales regardless of events in Westminster.