Roxanna Mohammadian-Molina, Chief Strategy Office at BLEND Network, comments: “That the Halifax House Price Index continues to swing wildly from month to month is doing little to aid its credibility, although the fact that May’s swing in house price growth was more muted than in months past and that the index beat expectations will be welcome. May is typically one of the best months for transactions so a pick-up in house prices should have been expected. The fact that they fell back from 1.2% in April to 0.5% in May however, suggests that after a reasonable pick up in April we’ve dropped back into the doldrums.
“That’s slightly mystifying quite frankly. One might expect that with Brexit having been delayed by six months previously hesitant homeowners might rush to put their properties on the market in the hope of completing a sale before the end of October.
“It is possible, as others have suggested in recent weeks, that the housing market is tracking a general malaise in the UK economy. There continues to be a lack of property for sale but this is a fairly long term trend which would normally be supportive of house price growth.
“The problem now may well be risk averse buyers who look at the uncertainty being caused by Brexit and other factors and are staying put rather than risk committing to buying a property until the economic outlook stabilises.
“That said, it is rather difficult to see house price growth of 5.2% year-on-year as disappointing when compared with last year when the best that 2018 could achieve was house price growth of just 3.7%. The long terms narrative for 2019 so far appears to be that house price growth is underperforming but isn’t underperforming as badly as last year.”