UK housing market ‘stable’ in May as prices dip 0.1% – business live | Business

Building up a deposit to buy a house is a large hurdle for first-time buyers, especially those who can’t turn to wealthy parents for help.

But the Labour Party are pledging to help – last night, they annouced they would permanently sustain and expand the current mortgage guarantee scheme.

The measure sees the government act as guarantor for part of a home loan – to encourage lenders to make low-deposit mortgages available for first-time buyers,

Labour, whose offering is dubbed ‘Freedom to Buy’, says it will help over 80,000 young people to get on the housing ladder over the next five years.

Labour leader Keir Starmer says:

“After 14 years of Conservative government, the dream of home ownership is out of reach for too many hard working people. Despite doing everything right, they can’t move on and up. A generation face becoming renters for life.

“My parents’ home gave them security and was a foundation for our family. As Prime Minister, I will turn the dream of owning a home into a reality.

“Our changed Labour Party will be on the side of the builders not the blockers, to get Britain building again. My Labour Government will help first-time buyers onto the ladder with a new Freedom to Buy scheme for those without a large deposit, and by giving them first dibs on new developments.

Labour are also pledging planning reform to build 1.5 million homes, saying this is the best way in the long term.

They say:

We will reintroduce housing targets, build on disused grey belt land, fast track permissions on brownfield and build the next generation of new towns.

House prices rose fastest in the North West of England in May – they were up 3.8% on an annual basis in May, taking the average price to £232,258.

In Northern Ireland, prices rose by 3.2%, while in Scotland they were 1.9% higher than a year ago.

In Wales, house prices grew annually by +0.7% – below the UK average of 1.5%.

Prices fell fastest in Eastern England, where they dropped by 0.8% in the year to May.

In London, prices have risen by 0.2% over the last year, to an average of £536,821 – still the most expensive part of the UK.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Stability has returned to the UK housing market, the latest data from lender Halifax shows, with prices dipping slightly last month.

Halifax’s latest house price index, just released, shows that average prices were little changed month-on-month in May,

The average house prices slipped to £288,688 last month, a 0.1% drop compared to £288,862 in April.

But on an annual basis, house price inflation rose to +1.5% in May, up from +1.1% in April.

Rising wages and a pick-up in economic confidence are supporting house prices, says Amanda Bryden, head of mortgages at Halifax.

Bryden explains:

This has been reflected in a broadly stable picture in terms of property price movements, with the average cost of a property little changed over the last three months.

Bryden adds that a period of relative stability in both house prices and interest rates should lift confidence for both buyers and sellers.

While homebuyers and those remortgaging will continue to respond to changes in borrowing costs, set against a backdrop of a limited supply of available properties, the market is unlikely to see huge fluctuations in the near term.

Last week, rival lender Nationwide reported a rise in prices last month.

It’s important to remember, though, that both Halifax and Nationwide’s data is based on mortgage transactions, so doesn’t capture cash buyers.

Also coming up today

UK entrepreneur Mike Lynch will be celebrating after being cleared of all charges by a US jury in a fraud case related to the sale of his software company Autonomy to Hewlett-Packard (HP) in 2011.

Investors are poised for the latest US jobs report, which is expected to show the unemployment rate stuck at 3.9% in May.

The agenda

• 7am BST: Halifax house price index for May

• 7am BST: German industrial output report for May

• 10am BST: Third estimate of eurozone GDP for Q1 2024

• 1.30pm BST: US non-farm payroll report for May