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29th May 2009
House prices rise 1.2% in May
House prices rose by 1.2% in May with the annual fall in house prices improving significantly, the latest figures from Nationwide reveal.
The Nationwide House Price Index for May puts the average house price at £154,016, 11.3% lower than the same last time year but an improvement to April’s annual rate of decline of 15%.
The three-month on three-month rate of change, which is said to be a smoother indicator of price trends, climbed from -3% in April to -0.5% in May to its highest level since January last year.
Supply of property on the market remains limited but Nationwide says this may not continue in the long run.
Martin Gahbauer, chief economist at Nationwide, says: “Potential sellers of existing homes who had previously delayed the listing of their property may not be able to wait indefinitely, particularly if they have seen a loss of income due to the
deteriorating labour market situation.”
Gahbauer says there may be a risk that house price falls may begin gathering pace if supply does increase.
But he adds: “If buyer interest translates into actual sales and outweighs any potential increases in supply, then the recent moderation in price falls may continue.
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