Annual UK house price growth slowed to 4.6 per cent in May, down from 5.2 per cent a month earlier, the latest Nationwide house price index reveals.
House prices rose by an average of 0.3 per cent during the month, compared to a 1 per cent increase in April. The average price of a house in the UK in May was £195,166, compared to £193,048 a month previous.
Nationwide chief economist Robert Gardner expects annual house price growth to trend towards earnings growth – around 4 per cent – over the long-term.
He says: “The annual pace of house price growth slowed to 4.6 per cent in May. This resumes the gradual downward trend that had been in evidence since the summer of 2014, which was briefly interrupted in April when house price growth edged up to 5.2 per cent from 5.1 per cent in March.
“Over the longer term we would expect house price growth to converge with earnings growth, which has typically been around 4 per cent per annum.
“However, much 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.”