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Property prices rose in May

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The latest official house price index looks positive, but it's based on the pre-Brexit market
Property prices rose in May

The new official house price index from the government said that the average price of a property in the UK was £211,230 in May, 1.1% higher than it was in April, and a healthy 8.1% up on May 2015.

Annual house price inflation in England was 8.9%, 4% in Scotland, 3.6% in Wales and 5.9% in Northern Ireland. In London prices are up 13.6% year on year.

The volume of lending approvals for house purchases recovered slightly, by 1.3% in May, following a 6.2% fall in April. However, approvals on a monthly basis are still below the levels seen in the 10 months before the Stamp Duty changes.

Jonathan Hopper, managing director of the buying agents Garrington Property Finders, warned that the figures announced today don’t reflect the current market:

“Reassuringly rosy though it is, this official house price data offers scant insight into what’s going on in today’s property market.

“This May index offers a snapshot of the market that already looks sepia-tinted. The image is a familiar one – strong price growth in much of England, with prices in the South East and East Anglia rising at a blistering pace.

“But the pre-referendum market it portrays – in which steady price rises were underpinned by strong demand and limited supply – now feels a world away. Many buyers have become very cautious and are asking for big price reductions – and vendors who have to sell are starting to offer discounts, often big ones.

“The pre-referendum seller’s market has gone, and buyers have regained the upper hand – even if lack of supply is likely to prop up prices in the medium-term.

“In less than a month, the property market has switched from a seller’s to a buyer’s market.”

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