United Kingdom: House prices decelerate in May
June 3, 2015
In May, home prices in the U.K. rose 0.3% over the previous month, which followed the 1.0% increase observed in April, according to the Nationwide Building Society (NBS). April’s figure had marked the fastest increase since April 2014. On an annual basis, home prices rose 4.6% (April: +5.2% year-on-year). The average house price was GBP 195,166 (April 2015: GBP 193,048).
May’s deceleration continues the gradual downward trend that had been in evidence since mid-2014. NBS added that, looking forward, the developments in the housing market “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.”
According to the Q1 2015 quarterly release, NBS data showed that, geographically speaking, the strongest increases in prices are still in the city of London, where the average house price rose 12.7% year-on-year. This is markedly higher than the 5.9% rise that has been recorded in the U.K. as a whole. The regions other than London that saw higher-than-average price increases were: Outer Metropolitan, Outer South East and East Anglia.
Author: Dirina Mançellari, Senior Economist