House prices in the UK have continued to increase on an annual basis, as the average price jumped by 1.3% in May to £264,249, after growth of 0.6% in April, Nationwide has found.

In its monthly house price index (HPI), the building society also found that house prices increased by 0.4% month-on-month, after a drop of 0.4% in April.

Chief economist at Nationwide, Robert Gardner, said: "UK house prices increased by 0.4% in May, after taking account of seasonal effects. This resulted in a slight pickup in the annual rate of house price growth to 1.3% in April, from 0.6% the previous month.

"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. Consumer confidence has improved noticeably over the last few months, supported by solid wage gains and lower inflation."

Nationwide has stated that despite the announcement of a General Election on 4 July, house prices are not set to be affected.

Having analysed house prices following previous elections and the EU referendum in 2016, the building society said that house prices experienced no volatility or witnessed a significant change in house price trends.

Personal finance analyst at Bestinvest, added: "After a rocky 2023, confidence returned to the market at the start of 2024 when buyer appetite was boosted by easing mortgage rates and the prospect of several interest rate cuts throughout the year. The Bank of England’s (BoE) Monetary Policy Committee then adopted a ‘higher for longer’ stance at its meetings in the first quarter in the face of stubborn inflation before softening its stance at its most recent meeting in May raising hopes that a summer rate cut was imminent.

"With the country now braced for a general election in just over a month’s time, few expect a rate cut as early as June as the central bank is unlikely to want its decision to become politicised. The BoE has never reduced rates just before a general election since becoming independent in May 1997, potentially ruling out any immediate action - though expectations and reality don’t always align.

"Home movers are unlikely to delay a buying decision until after the election is concluded, particularly if a deal is close to conclusion. However, with so many major challenges for the property market over the past few years, from a global pandemic to surging demand amid the race for space and the stamp duty holiday and soaring borrowing costs, those sitting on the fence may be willing to hold off until a rate cut has happened and the dust settles after the election before they plough into the market."

---