UK HOUSE prices fell in May for the first time this year as rising mortgage rates affected buyer demand.
According to lender Nationwide, average UK house prices fell 0.6 per cent in May compared with April. The average home price stood at £278,024, up 1.7 per cent from a year earlier, slower than the 3 per cent annual growth recorded in April.
Robert Gardner, chief economist at Nationwide, said a “loss of momentum was to be expected” because of uncertainty linked to the conflict in the Middle East and rising energy prices and market interest rates, The Guardian reported.
Moneyfacts data showed the average two-year fixed mortgage rate was 5.68 per cent at the end of May, while the average five-year fixed rate was 5.63 per cent.
Tom Bill of Knight Frank said the market was slowing “at precisely the time of year when you would expect momentum to be building”.
Savills said the war in the Middle East had “fundamentally changed” its outlook and forecast a 2 per cent fall in average UK house prices this year instead of the 2 per cent rise it had predicted earlier.
The Bank of England kept its key interest rate unchanged at 3.75 per cent in April.
