UK house prices rise for first time in three months

UK house prices have risen for the first time in three months, with the housing market showing signs of "resilience" against high mortgage rates.

Nationwide said house prices were up 0.4% in May, compared to April, putting the average cost of a home at £264,249. Compared with May last year, prices were 1.3% higher.

While interest rates have remained at their highest levels in over a decade, consumer confidence has been growing and wages are rising.

Nationwide's chief economist Robert Gardner said: "The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer-term interest rates in recent months.

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"Consumer confidence has improved noticeably over the last few months, supported by solid wage gains and lower inflation."

Inflation dropped to 2.3% in April – the lowest level in nearly three years.

He added that the upcoming general election was unlikely to have much of an impact on the market in the short term.

Mortgage brokers said the slight increase in prices reflected an increase in activity in the market over the last few months.

Michelle Dawson, director at Lawson Financial, said: “A slight tick-up in prices reflects the slight increase in activity we have seen, however the market is a long way off truly sparking.

“Borrowers are still hopeful of interest rates coming down but the ever-cautious Bank of England holds that touchpaper.

“With the election looming, we need some stability and a sense of direction. Now is the time to buy, just before the upturn rather than after it.”

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Houses for sale in Britain hit an eight-year high in May a sign of a possible recovery. The property portal Zoopla said new housing supply is growing faster than agreed sales on improved optimism.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “With inflation continuing to fall, it looks increasingly likely that a rate cut is on the cards, perhaps not as early as the June meeting of the Bank of England but in August.

"This should give the market a welcome boost after the general election, particularly as some would-be buyers have been waiting for the downward trajectory in interest rates before committing. This, rather than the election outcome, is more likely to influence homebuyer decision making."

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