House prices rose last month, Nationwide has reported – although it also reported that they fell, triggering a front page headline in today’s Times, “House price slump triggers fears of new property recession”.
On a non-seasonally adjusted basis, prices stood at an average of £208,711 – up from £207,699 in April – and with a gulf of over £100,000 between Nationwide’s and Rightmove’s latest respective data.
According to Rightmove, asking prices for homes new to the market have continued to rise and now stand at an average £317,281.
Despite the rise which it reported yesterday, Nationwide said that on a seasonally adjusted basis, prices fell – by 0.2%, following a 0.4% drop in April.
Annually, Nationwide said that house price inflation was 2.1% last month, down from 2.6% in April.
Robert Gardner, Nationwide’s chief economist, said: “House prices recorded their third consecutive monthly fall in May – the first time this has occurred since 2009.
“The annual rate of growth slowed to 2.1%, the weakest in almost four years.
“It is still early days, but this provides further evidence that the housing market is losing momentum.
“Moreover, this may be indicative of a wider slowdown in the household sector, though data continues to send mixed signals in this regard.
“While real incomes are again coming under pressure as inflation has overtaken wage growth, the number of people in work has continued to rise at a healthy pace. Indeed, the unemployment rate fell to a 42-year low in the three months to March.
“If history is any guide, the slowdown is unlikely to be linked to election-related uncertainty. Housing market trends have not traditionally been impacted around the time of general elections.
“Rightly or wrongly, for most home buyers, elections are not foremost in their minds while buying or selling their home.”
Gardner said, however, that Nationwide still believes that house prices will go up 2% this year. He did not say whether this would be on a seasonally adjusted basis or not.
Comments (3)
As always you don’t have to have a degree in mathematics, an A, O or GCSE or any other qualification to realise that a minute %age in monthly house prices up or down in the wider picture means virtually nothing if we are comparing apples with apples. So many differences across the country with diiferent types of properties and regional variances influencing values. Away from the standard properties often negotiated prices up or down for whatever reason during the sales/buying process alter the ‘value’
One problem is that vendors often take these reports at face value and expect their house asking price to go up if prices go up, but never down when the trend is the other way! Thats human nature.
What I think we need to assist us is a housing index based on just one or two single types of property. For example if we had the 1920’s/1930’s 3 bed SD built extensively throughout the country plus its 1960’s or 1970’s cousin we would over time build a picture comparing apples with apples. This would give a far more true picture of what is happening.
Local agents and valuers will of course have this information at their fingertips.
The main problem in the media is that the journalists always extract the headline and pay scant attention to the detail
“a gulf of over £100,000 between Nationwide’s and Rightmove’s latest respective data.” Proof if proof were needed that there’s lies, damned lies and statistics.
I am afraid history is not always a guide, and the Nationwide needs to try and understand harder what is happening now at the coal face, as opposed to sitting in a remote office analysing figures and comparing to a text book.