UK house prices surge 0.9% month-on-month in May: Nationwide

LONDON: British house prices surged again last month but a slowdown, caused by the worsening cost-of-living crunch, is likely on the way, mortgage lender Nationwide said on Wednesday.

House prices rose by 0.9% month-on-month in May after a 0.4% rise in April, marking a 10th consecutive month of gains, Nationwide said.

A Reuters poll of economists had pointed to a 0.6% rise.

House prices were 11.2% higher than their level in May 2021, slowing from April’s 12.1% annual increase.

Nationwide said the strength of house prices had been surprising, fuelled by demand outstripping the supply of homes coming to the market.

But it warned house price growth was likely to cool in the months ahead.

“Household finances are likely to remain under pressure with inflation set to reach double digits in the coming quarters if global energy prices remain high,” said Robert Gardner, Nationwide chief economist.

Bank of England data on Tuesday showed a sharp drop in mortgage approvals in April, a potential sign of the slowdown ahead.