UK house prices rise in May, stay above 8 pct for 3rd straight month

Housing prices in the United Kingdom rose in May on a monthly basis, while annual house price inflation remained unchanged, staying above the 8 percent mark for three consecutive months.

The price of an average house or flat in the UK rose by GBP16,000 in the year to May, data released by the Office of National Statistics (ONS) showed Tuesday. The house price inflation rate remained flat at 8.1 percent, the same as in April, bringing the average price to GBP211,000. However, prices have risen 1.1 percent on a monthly basis.

The main contribution to the increase in UK house prices came from England, where house prices increased by 8.9 per cent over the year, with the average price in England now GBP227,000. In Scotland, the average price increased by 4 per cent to GBP141,000 and the average price in Northern Ireland was GBP118,000 in May.

Moreover, London witnessed the highest annual growth in house price inflation increasing to 13.6 percent from 13.4 percent. That puts the average price of a house in London at GBP472,000 while the lowest average price continues to be in the north east, at GBP124,000.

The Royal Institution of Chartered Surveyors (RICS) said last week that the supply of homes in the UK fell at the sharpest rate till date and housing demand hit an eight-year low post the fallout of Britain in the wake of Brexit turmoil.

"Big events such as elections typically do unsettle markets, so it is no surprise that the EU referendum has been associated with a downturn in activity," said Simon Rubinsohn, Chief Economist, RICS.

Meanwhile, RICS said that it expects house prices to fall in London and East Anglia in the months ahead.