House prices up by 11.1%
House prices in the UK have risen by 11.1 per cent in the past 12 months, according to Nationwide's house price index.This is the thirteenth successive month in which the bank has recorded a rise in house prices, which grew by 0.7 per cent on the previous month. The average price of a house in the UK has now reached £186,512.However, there may be signs of moderation in the housing market, as mortgage approvals in May were around 17 per cent below the level recorded in April.Nationwide's chief economist Robert Gardner said it is too early to say whether this is a sign of cooling in the market. It may be due to the introduction of Mortgage Market Review (MMR) measures, which could take a few months to become established."The underlying pace of activity should become more evident as we move through the summer months and the impact of MMR becomes clearer," he added.The bank's analysis supports data recently released by the government on the role of Help to Buy in the housing market.First time buyers are driving the market, accounting for 48 per cent of all purchase activity in March.Despite this, Help to Buy is unlikely to be the major factor behind the housing recovery. The number of mortgages approved through both the mortgage guarantee scheme and the equity loan scheme were equivalent to nine per cent of total mortgage completions in the first quarter of the year."Low mortgage rates and growing buyer confidence on the back of improving labour market conditions and the brighter economic outlook are probably playing a much greater role in stimulating buyer demand," Mr Gardner commented.In London, Help to Buy is playing even less of a role. While prices there rose at twice the rate as those in other parts of the country (an annual pace of 18 per cent), Nationwide estimates that the initiative accounted for just four per cent of all mortgage completions in the capital during the first quarter of the year.
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