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House prices in the UK recorded another double-digit percentage increase in May, according to the latest Nationwide house price index, but the growth has slowed from April.
House prices were 11% higher in May than a year earlier, slowing from April's 12% rise in average property value.
Prices also increased by 0.9% month on month in May, accelerating from the 0.4% rise reported in April.
Robert Gardner, Nationwide's chief economist, said: ‘Despite growing headwinds from the squeeze on household budgets due to high inflation and a steady increase in borrowing costs, the housing market has retained a surprising amount of momentum.
‘Demand is being supported by strong labour market conditions, where the unemployment rate has fallen towards 50-year lows, and with the number of job vacancies at a record high. At the same time, the stock of homes on the market has remained low, keeping upward pressure on house prices.’
The average price now stands at £269,914, rising from £267,620 in April.
‘We continue to expect the housing market to slow as the year progresses. Household finances are likely to remain under pressure with inflation set to reach double digits in the coming quarters if global energy prices remain high. Measures of consumer confidence have already fallen towards record lows. Moreover, the Bank of England is widely expected to raise interest rates further, which will also exert a cooling impact on the market if this feeds through to mortgage rates,’ Gardner added.
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