House prices rise 0.7% in May 2014

The average price of UK homes rose 0.7% in May 2014, slowing slightly from the 1.2% increase in April 2014, figures from Nationwide reveal.

Annual prices increased 11.1% in the year to May 2014 compared to from 10.9% in the year to April 2014.

The average house price has risen from £183,577 in April 2014 to £186,512 in May 2014, according to the data.

Key findings:

  • mortgage approvals in April 2014 were 17% below January's high
  • 45% of Help to Buy mortgage guarantee loans were for properties costing £125,000 or less
  • first-time buyers accounted for 48% of house purchases in March 2014, a record high.

The findings suggest that Help to Buy may not be the main factor behind the recent boost in the market:

  • 12,853 new Help to Buy mortgages in Q1 2014, making up only 9% of total mortgages in the period
  • average house prices in London increased 18% in Q1 2014,almost twice the pace of the rest of the country
  • in Q1 2014 Help to Buy accounted for around 4% of total mortgages in London.

Robert Gardner, chief economist at Nationwide, said there had been "tentative signs" of a slowdown in the market:

"It is too early to say whether nationally this is indicative of a cooling trend in the wider market. The slowdown may partly be the result of the introduction of Mortgage Market Review (MMR) measures, which may take a few months to bed down. The underlying pace of activity should become more evident as we move through the summer months and the impact of MMR becomes clearer."