The annual rise in UK house prices picked up again in May, the latest figures show, with prices continuing to rise at a faster pace than the general cost of living.
UK property prices increased by 3.1% annually last month, up from 2.1% the previous month, according to the latest Nationwide house price index.
Increasing house prices pose a problem for many would-be property purchasers, especially first-time buyers struggling to get a foot on the housing ladder.
“House prices continue to rise above inflation. Whilst demonstrating the market’s resilience in the face of political uncertainty, this will be sobering news for many first-time buyers who are struggling to make their first step onto the ladder,” said Jeremy Duncombe, a director at Legal & General Mortgage Club.
For a healthier market, Duncombe insists that property prices need to rise in line with inflation.
He continued: “With Monday’s announcement of a coalition agreement, the newly-formed government must consider solutions to restructure our housing market and introduce measures that bring house price inflation in line with earnings.
“More affordable housing needs to be built to allow all those who wish to do so, a better chance of achieving homeownership. More than that, however, we also need to see incentives for home movers and last time buyers looking to downsize, so that we can get our housing market on the move.”