House prices are stuck in the doldrums and inched ahead by just 0.3% in May, the latest survey by the Nationwide building society shows.
That leaves prices 1.2 per cent lower than a year ago, prompting Robert Gardner, chief economist at the Swindon-based building society, to say that residential property values and sales are reflecting the lacklustre state of the economy.
"The UK economy returned to growth in the first three months of 2011, albeit at a modest pace," he said.
"Nevertheless, the modest improvement in economic conditions has so far been insufficient to pull the housing market out of its torpor, as the headwinds facing households remain strong."
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (RICS), said: “The Nationwide data provides further evidence of a largely stagnant residential market. This follows on from numbers on the level of transactions published earlier in the week by the HMRC and the BBA, both of which showed a broadly flat trend in sales.
"Meanwhile the forward looking indicators from the last RICS Housing Market Survey suggest that there is little reason to expect an improvement in turnover in the near term. A combination of factors including uncertainty over the outlook for the economy and an ongoing reluctance from the banks to make finance more readily is continuing to cast a pall over the sales market.”
