According to Nationwide Building Society authorized and regulated by the Financial Services Authority, house prices in May are still rising. Prices increased by another 0.5% in May, leading to the increase of the price of the average UK home up to £169,162, much more than the previous average of £15,000. There was a slight decline in the annual house price inflation from 10.5% to 9.8%.
However, prices might be still in modest rising because of few properties being put up for sale. Martin Gahbauer, the chief economist of the Nationwide said that housing market conditions remained characterized by a relative scarcity of properties for sale and thin transaction volumes in spite of a slow return of more sellers in recent months.
There is a consistency between the current supply-demand balance and relatively stable to modestly increasing prices.
The relative shortage of properties for sale in addition to low level of sales by historical standards might push prices up. Mr Gahbauer stated that house prices had gone up by 12.2% since reaching a trough in February 2009.
The government is going to raise the level of capital gains tax to 40% from 18% for top-rate tax payers. According to the Nationwide, the possible delay between actual implementation of the plan and announcement of the increase in this month’s Budget could lead to more houses coming onto the market.
The chief economist said that unless there was an insignificant time delay between the confirmation of the details and its actual implementation, several buy-to-let landlords and second home owners may make their decision of selling houses before the introduction of the higher rate. Buyers could enjoy the favorable conditions because of the possible supply-demand balance shifted.
Previously, house sellers were required to provide a home information pack to prospective buyers. However, such requirement has recently been abolished, which may affect the market.
House prices keeps on rising modestly