House prices hit new record

House prices increased by 0.3% month-on-month in May to reach another record average high in cash terms, Nationwide Building Society has reported.

UK property values increased to £195,166 on average, surpassing an all-time high of £193,048 the previous month.

April was the first time Nationwide had recorded typical UK house prices over the £190,000 mark.

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But the figures showed house price growth has slowed down, at 4.6% higher in May than a year earlier, slowing from an annual growth rate of 5.2% in April.

The 0.3% month-on-month increase follows 1% monthly growth in April.

Robert Gardner, Nationwide's chief economist, said the slowdown resumes a gradual downward trend that started in summer last year but was briefly interrupted in April when growth accelerated.

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He said: "Annual house price growth is now running at less than half the pace prevailing in mid-2014.

"Over the longer term we would expect house price growth to converge with earnings growth, which has typically been around 4% 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."

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