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Annual UK house price growth slowed in May, Nationwide says. Property cash buyers at record high, Nationwide says
(about 1 hour later)
The annual pace of UK house price growth slowed last month, according to the latest survey from Nationwide. Nearly four out of 10 homes were sold without the need for a mortgage in the first quarter of the year - a record high, the Nationwide has said.
The building society said prices in May were 4.6% higher than a year earlier, down from a rate of 5.2% in April. The building society - the UK's second biggest mortgage lender - said that 38% of properties were sold to cash buyers.
It said that low interest rates had encouraged investment in bricks and mortar, while mortgage lending had been squeezed in recent years by the banks.
It also said that UK house prices in May were 4.6% higher than a year ago.
This was a slowdown from the 5.2% annual rate of increase recorded in April.
Nationwide said this marked a resumption of a "gradual downward trend" in annual price growth which had begun last summer.Nationwide said this marked a resumption of a "gradual downward trend" in annual price growth which had begun last summer.
However, prices in May were up 0.3% compared with April, taking the average price of a property to £195,166.However, prices in May were up 0.3% compared with April, taking the average price of a property to £195,166.
Nationwide said cash purchases of houses also reached an all-time high of 38% in the first three months of the year, just above the 2014 average of 36%. The proportion of cash transactions - without the need for a mortgage - leapt in the immediate aftermath of the financial crisis.
It said the immediate aftermath of the financial crisis had seen the biggest spike in cash transactions, when tighter credit conditions and unemployment drove the increase. Tighter credit conditions and unemployment drove the increase at this time, according to Robert Gardner, chief economist at the Nationwide. These elements would not have had the same effect on cash transactions.
Last year, the average proportion of cash buyers was 36%, which then moved up to the new record level of 38% in the first quarter of this year.
Figures published by the Bank of England suggests that the peak is unlikely to be extended, owing to a pick-up in mortgage lending. The number of mortgage approvals for house purchases rose to a 14-month high in April, Bank data showed on Tuesday.