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UK home prices have risen more than expected in May, supported by low unemployment and strong wage growth, lenders said.
The average cost of the property rose 0.5% between April and May to £273,427, reversing the 0.6% decline in the previous month, showing data released on Monday.
Prices rose at an annual rate of 3.5%, from 3.4% in the previous month. Both are stronger than the monthly increase of 0.1% and the annual rise forecast of 2.9% by economists voted by LSEG.
“Despite the broader economic uncertainty in the global economy, the underlying conditions for potential home buyers in the UK remain supportive,” said Robert Gardner, chief economist across the country.
He added: “Unemployment remains low, revenues are rising at a healthy pace, household balance sheets are strong, and borrowing costs could be a little mitigated if bank fees drop even further, as we and most other analysts expect.”
Gardner said the activity appears to be well endured following the end of the stamp mission holiday.
Starting April 1, stamp duty thresholds have returned to pre-2022 levels, increasing tax costs for many property buyers.
For example, first-time buyers will pay taxes on assets worth £300,000 or more, rather than the previous £425,000.
