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26 May 2006
House prices have crept up by just 0.2 per cent in May, figures from Nationwide show.
The small increase is slightly up from April's 0.1 per cent rise and means that house prices are just 4.7 per cent higher than they were in 2005.
This sluggish growth means that an average house in the UK is now worth £164,632, which is nearly £7,500 up from this time last year.
Despite the small increases, housing market data still points to continued house price inflation, with house purchase activity very strong and mortgage approvals running at a high level for the past eight months, said Nationwide.
"Activity this strong was last seen when house price inflation was in double digits two years ago," commented Nationwide group economist Fionnuala Earley.
However, stretched affordability among first-time buyers, rising transactions costs and high house prices relative to income are signs that house price inflation may be cooling, said the building society.
If you are considering taking out a mortgage on a new house, you will be credit checked. Order your credit report first and see what lenders see.
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