May day for house prices

According to Hometrack , the housing intelligence firm, after 20 months of price falls, UK house prices remained unchanged in May…

The group said the average cost of a home in England and Wales remained stable during May, with just 13 per cent of postcode districts reporting a decline in prices, compared with 58 per cent in January.

On an annual basis, house prices are down 9.6 per cent, compared to a reading of -10.1 per cent in April, said the firm.

The news follows on from the Nationwide, who last week reported a rise in prices of 1.2 per cent in May, compared with April, taking the average price of a home to £154,016.

According to the Nationwide, the rise in May was the second in three months, and takes the annual rate of decline to 11.3 per cent, slowing from the 15 per cent reported in April.

However, Hometrack reflects the Nationwide's view that it is still to early to say the property market is in recovery.

The Nationwide cautioned that rising unemployment and the ongoing tightening of lending criteria means house prices are likely to resume their downward spiral.

Richard Donnell, Hometrack's Director of research, said, "While house prices remain unchanged over May the outlook for the housing market remains fragile with a number of factors that could well de-rail the recent pick up in market activity.

Given the weak outlook for the economy, house prices are expected to remain under downward pressure for the foreseeable future."

However, Hometrack has reported a nine per cent month-on-month rise in the number of sales agreed during May, while the number of potential buyers registered on estate agents' books increased six per cent.

Hometrack's survey is based on responses from 1,776 estate agents and surveyors.