House prices rose by 0.7 per cent in May as London property values once more drove the market to greater heights.

Annual house price inflation in the UK stood at 8.9 per cent last month, the figures from the Land Registry have advised, with the annual rate in the capital rising to 15.3 per cent.

Similarly positive findings were reported earlier this week by the Nationwide Building Society, but analysts have suggested that such increases maybe the precursor to a slowdown in market activity.

"We continue to believe that house prices will lose buoyancy gradually over the coming months, but the Nationwide data reinforces our suspicion that the slowdown will be gradual and erratic," noted analysts Global Insight.

However, the Land Registry study reported no such cooling. "No county or unitary authority experienced negative annual price change this month," the report advised.

But with many now viewing a further rise in interest rates next week to be a foregone conclusion, buyers may find that they are struggling to afford new properties.



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Author:  Joanne McCabe

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