House price rises in Lancashire predicted to slow this year

House prices were 11.2 per cent higher in May than a year earlier, although the annual pace of growth is slowing, the Nationwide Building Society’s monthly index reports.

Across the UK, the average property value in April had been 12.1 per cent higher annually.

Prices also increased by 0.9 per cent month on month in May, taking the average house price to £269,914, Nationwide Building Society said.

Robert Gardner, Nationwide’s chief economist, said: “Demand is being supported by strong labour market conditions, where the unemployment rate has fallen towards 50-year lows, and with the number of job vacancies at a record high.

“At the same time, the stock of homes on the market has remained low, keeping upward pressure on house prices.

“We continue to expect the housing market to slow as the year progresses.

“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.”

Mr Gardner said measures of consumer confidence have already fallen towards record lows – and the Bank of England is widely expected to raise interest rates further, which will also exert a cooling impact on the market if this feeds through to mortgage rates.

Many people are looking to improve their homes as well as move, he added.

He said: “Our recent housing market survey revealed that, as well as more people looking to move, over half of those surveyed (54 per cent) are considering enhancing their home.

“The most popular option for those looking to make improvements was to add or maximise space, with more than a third (37%) citing this as a motivating factor.”