Average UK house prices fell 0.2 per cent in May, after growing by 0.3 per cent in April, after taking seasonal factors into account, Nationwide’s House Price Index revealed.

In the release, Nationwide highlighted that May 2019 also marked the sixth consecutive month that annual house price growth remained below 1 per cent, at 0.6 per cent, falling from 0.9 per cent the previous month. The average asking price for a property in the UK in May was £214,946, rising marginally from £214,920 in April 2019.

Commenting on the data, Nationwide chief economist Robert Gardner said: “Survey data suggests that new buyer enquiries and consumer confidence have remained subdued in recent months.”

However, Gardner drew attention to further indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, and noted that volumes have “remained broadly stable”.

“Housing market trends are likely to continue to mirror developments in the broader economy. While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity, with price growth and transaction levels remaining close to current levels over the coming months,” he said.

First-time buyers continued to take advantage of the low interest rate environment, continuing their steady recovery in recent quarters, according to the Nationwide chief economist. Their numbers reached 359,000 in the twelve months to March, just 10 per cent below the peak in 2006, which Gardner credited to “robust labour market conditions”, while employment rates continue to increase at a healthy rate and earnings growth “slowly gathering momentum”.

Further commenting on first-time buyers, Gardner added: “Low borrowing costs have also provided important ongoing support. Even though house prices remain high relative to average incomes, the cost of servicing the typical mortgage as a share of take home pay has remained close to or below long run averages in most parts of the country.”

Trussle mortgage expert Dilpreet Bhagrath said: “With annual house price growth slowing to just 0.6% in May, it is promising to see that the number of property transactions and mortgage approvals have remained stable, suggesting that people are still looking to buy a home.”

Despite this, Bhagrath reiterates that many prospective buyers still face the unrelenting challenge of raising a deposit. “It is no secret that raising enough money for a deposit is one of the main challenges when it comes to homeownership, particularly for first time buyers looking for their first home. As house prices remain fairly high compared to average incomes, it’s not surprising to see that in London it would take someone earning the average wage more than 15 years to save for a 20% deposit,” the Trussle mortgage expert explained.

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