Housing bounces back in May but recovery hopes still a long way off

Hopes of a housing market recovery remain “elusive” despite a modest bounceback in May, experts warned on Thursday.

Average UK prices rose 1.5% in May lender Halifax said, only partially recovering the biggest fall in almost eight years in April, when the market slumped 3.1%. But annual price growth dropped from 2.2% to 1.9% as Halifax said the figures reflected a “relatively subdued” market. Interest rates remain close to record lows at 0.5%, keeping mortgage rates down. But confidence is fragile as wages barely keep up with inflation.

But EY ITEM Club chief economic adviser Howard Archer said: “The housing market is struggling to gain traction amid challenging conditions and we suspect that any meaningful upturn will remain elusive over the coming months.”

Samuel Tombs of Pantheon Macroeconomics said he expected prices “to flatline in the second half of this year”.

Elsewhere today, property portal OnTheMarket, which floated in February to rival Rightmove and Zoopla, slipped into the red in maiden results.

It posted an operating loss of £10.8 million after costs such as a legal fight over its previous policy barring agents from listing with both of its bigger rivals.