Home prices are still higher than a year ago but market is starting to cool, says nationwide | Business Newsletter

Home prices are still much higher than they were at this time last year, according to the Nationwide Building Society, but the rate of growth has slowed for the third month in a row.

Home prices in May were 11.2% higher than a year earlier, although there are signs the housing market is starting to slow, after hitting 14.3% in March and falling. 12.1% in April.

“Household finances are likely to continue to come under pressure with inflation likely to hit double digits in the coming quarters if global energy prices remain in place,” said Robert Gardner, chief economist at Nationwide. high level.

Prices also rose 0.9 per cent between April and May, bringing the median house price to £269,914, a nationwide index showed.

Demand for homes remains strong, while supply is low in the market, mortgage lenders say, supporting prices strongly.

“We continue to expect the housing market to slow over the course of the year,” said Mr. Gardner.

“Household finances are likely to continue to come under pressure, with inflation likely to hit double digits in the coming quarters if global energy prices remain high.”

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Consumer confidence has collapsed, he said, and a further rate hike by the Bank of England is likely to further cool the housing market as they accept mortgage rates.

On Tuesday, the central bank said mortgage lending fell 36% in April in another signal that the housing market is starting to lose momentum in the face of rising inflation and a spending crisis. cost of living.

Net mortgage lending fell to £4.1 billion last month from £6.4 billion in March.

Mortgage approvals to buy a home also fell, from 69,500 to 66,000.