UK house prices slowing slightly

Most house price surveys agree that the market is slowing

Annual house price inflation slowed in May, according to the Office of the Deputy Prime Minister (ODPM).

Prices rose by 6% in the year to May, the ODPM said, compared with annual growth of 6.9% in April.

Recent surveys from mortgage lenders Halifax and Nationwide have also shown annual growth rates slowing.

However, the ODPM said the average UK house price rose slightly in May, standing at £182,651, compared with £181,832 in April.

Average prices rose 0.5% between April and May this year, the ODPM said, compared with a 1.3% rise during the same period last year.

Interest rates

The Halifax last week revealed that annual house price inflation had fallen behind average earnings growth for the first time since 2001.

The Halifax said that house prices had increased by 3.7% in the past year.

Earlier, the Nationwide Building Society said prices grew by 4.1% in the twelve months to June.

The recent slowdown in house price growth, coupled with weakness in consumer spending on the High Street, has led some analysts to speculate that UK interest rates could be cut next month.

Regional differences

Like the Halifax, the ODPM said that house price inflation varied between the north and south of the country.

House prices in Scotland, Wales, Yorkshire, the north west and north east of England are growing at an annual rate of over 10%.

However, annual house price inflation is less than 4% in the south and south west of England.

In London, annual house price inflation fell from 2.7% in April to 1.6% in May.