UK house prices increased by 0.2 per cent in May, largely due to sales in London – which saw a 0.6 per cent growth in prices – according to the monthly national housing survey by the property analysts Hometrack.

House prices in the south-east and East Anglia grew by 0.1 per cent. In all other regions, however, they remained either static or fell.

The survey, based on a monthly survey of estate agents and surveyors across England and Wales, showed that the number of new buyers registering with agents rose 0.4 per cent in May, compared to 2.1 per cent the previous month.

The volume of new listings increased 2.2 per cent, compared to 4.8 per cent last month. The sales-agreed indicator was also up 3.8 per cent.

Demand has risen in London ahead of supply over the past three months and prices have climbed 1.4 per cent. The impetus for growth in London came from the mostly domestic markets of south-west, south-east and north London, where prices grew by 1.1 per cent, 0.7 per cent and 0.5 per cent, respectively.

At 0.1 per cent, price growth in central London was lower in May than in the outer boroughs.

In contrast, demand across northern regions rose by 9 per cent, while supply grew by 28 per cent.

Richard Donnell, director of research at Hometrack, said: 

The latest survey of the housing market by Hometrack reveals a national market registering a slowdown in both demand and sales agreed while supply coming onto the market continues to rise . . . 

The volume of new buyers registering with agents grew by 0.4 per cent in May, down from increases of 2.1 per cent in April and 4.4 per cent in March. The growth in the number of sales being agreed slowed significantly in May, rising 3.8 per cent compared to increases of 10.1 per cent and 13.2 per cent over the previous two months. These trends mirror the pattern seen in previous years with overall levels of demand and sales agreed slowing after Easter. Increased mortgage rates and mounting concerns over the impact of the eurozone on the UK’s economic growth and employment are likely to keep demand and prices in check as we move into summer.

The improvement in market conditions over recent months has resulted in rising levels of supply coming to the market as sellers look to take advantage of strengthening market indicators. The time taken to sell currently stands at 9.3 weeks and the proportion of asking price achieved has increased to 93.2 per cent (a level last reached in September 2010). That said these improvements are concentrated in Southern England and are not representative of a general trend across the country as a whole. The supply of homes for sale grew by 2.2 per cent in May and has grown by 10.6 per cent over the last three months.