A SHORTAGE of homes for sale is keeping property prices buoyant, Britain’s biggest building society said yesterday.
Prices rose by 0.3 per cent last month – the first increase since February – wiping out a similar fall in April, according to the Nationwide.
Overall prices are 0.7 per cent lower than a year ago and the cost of a typical three-bedroom semi is now £166,022.
Perry Power, director of estate agents, Power O’Shea, said: “There has been a rise in activity in recent months. The market is stabilising rather than collapsing and while demand overall is still weak, so is supply and this is acting as a glass floor under prices.”
The Nationwide said house prices are still high relative to incomes, at more than five times average earnings.
The Government has launched a scheme allowing buyers to purchase a newly-built home with a fraction of the 20 per cent deposit often demanded by lenders but analysts say this is not enough to kick-start the market.
The Nationwide house price index was first produced in 1952.
During the Queen’s reign, average prices have risen almost 88-fold from £1,891, while the cost of goods and services has risen 25-fold.