House prices fall for third month in a row, says Nationwide

Values dipped by 0.2% month-on-month in May


House prices recorded their third monthly decrease in a row in May - the first time this has happened since 2009 - according to an index.

Nationwide Building Society said values dipped by 0.2% month-on-month in May, following a 0.4% decrease in April and 0.3% in March.

Across the UK, the average price was £208,711 in May, marking a 2.1% year-on-year increase.

A year earlier, price growth was more than double this rate, at 4.7%.

Robert Gardner, Nationwide's chief economist, said it is too early to know whether the slowdown is "merely a blip", a reflection of the squeeze on household budgets, or is due to mounting affordability pressures in key areas.

He said that despite the "unusually uncertain" outlook for the economy, the subdued level of building activity and the shortage of properties on the market are likely to help hold prices up.

As a result, he believes a small increase in prices of around 2% is likely over the course of 2017.

Mr Gardner said: "House prices recorded their third consecutive monthly fall in May - the first time this has occurred since 2009. The annual rate of growth slowed to 2.1%, the weakest in almost four years.

"It is still early days, but this provides further evidence that the housing market is losing momentum. Moreover, this may be indicative of a wider slowdown in the household sector, though data continues to send mixed signals in this regard."

Mr Gardner said that "if history is any guide", the slowdown is unlikely to be related to uncertainty over the General Election on June 8.

"Housing market trends have not traditionally been impacted around the time of general elections. Rightly or wrongly, for most home buyers, elections are not foremost in their minds while buying or selling their home."

Mr Gardner said analysis shows past general elections do not appear to have generated volatility in house prices or resulted in a significant change in trends.

"Broader economic trends appear to dominate any immediate election-related impacts."

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