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May 27, 2011    

Nationwide: House prices rise 0.3% in May

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by Kay Murchie

The latest house price index from the Nationwide Building Society has revealed a 0.3% rise for the month of May compared with April.

The latest fall means house prices are now 1.2% lower than this time last year with the average UK home costing £167,208.

Despite the rise, the housing market remains subdued as a lack of buyers, together with the ongoing lack of mortgage availability, means demand for housing is weak.

The prediction for house prices in 2011 is for a slight fall as demand for housing is expected to stay weak as a result of the uncertainty surrounding the economy and the Government’s massive spending cuts.

The Nationwide’s chief economist, Robert Gardner, said: “The UK economy returned to growth in the first three months of 2011, albeit at a modest pace.

“Nevertheless, the modest improvement in economic conditions has so far been insufficient to pull the housing market out of its torpor, as the headwinds facing households remain strong.”

Earlier this week, HM Revenue & Customs (HMRC) revealed a fall in the number of homes sold in April in the UK.

According to HMRC, 66,000 homes worth at least £40,000 or more were sold in the month – 1,000 less than the previous month and 6,000 lower than in April 2010.

Meanwhile, for the year to date, sales are 5% lower compared with the same period a year ago, said HMRC.

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