Property prices in the UK climbed up by 0.4% in May, according to the latest figures, bringing the average cost of a home in England and Wales to £167,912.
While the marginal month-on-month growth reveals that the housing market may be making a slow crawl towards recovery. The fact that year-on-year growth of 1.1% is the fastest growth pace since November 2011 may give consumers hope that the market is strengthening.
The positive figures from Nationwide are also supported by recent data which showed that property transactions in the first four months of the year were around 5% above the monthly average recorded in 2012.
The first quarter of 2013 also saw an improvement in the number of mortgage approvals for would-be buyers, which surpasses the monthly average recorded in 2012 by around 4%.
Commenting on the potential reasons behind this recent movement in the housing market, Robert Gardner, Nationwide’s Chief Economist, said:
“A number of factors are likely to be contributing to the pickup in activity. There has been an improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures, such as the Funding for Lending Scheme. Indeed, mortgage rates have fallen back towards all time lows in recent months.
“With the UK returning to growth in the first quarter of 2013, the improvement in wider economic conditions may also be playing a role in boosting sentiment.”
Recent figures from Rightmove have shown that average price of a house in the UK has shot up by more than £20,000 since the start of 2013, sending the average cost of a home to £249,000.
The figures from Rightmove also reveal that the capital is continuing to be a key driver for property price growth, with house prices in London rising by 16,000 (3.3%) in just a month to a record £509,000.