The Halifax published its May housing figures today. Although slightly different from the TEAM figures (see our story today ‘Housing interest and activity remain strong’), both companies show increased activity in the housing market during May.

According to the Halifax, house prices increased by 1.5% in May following April's 0.5% gain. Nationally, prices rose by 6.5% in the first five months of the year, they say.

May Halifax figures:

• Average house price - £129,568
• Monthly change – 1.5%
• Annual change – 22.7%

Halifax report:

The housing market continues to be strong with prices in the first five months of 2003 increasing at an average monthly rate of 1.3%, above the long-term historical trend. This is however, almost half the rate of increase in the last five months of 2002, one of the periods of highest house price inflation ever recorded.

The fundamentals underpinning the housing market remain in place - good labour market conditions and low interest rates are supportive of housing demand. The number of people in employment, a key factor driving housing demand according to our research, increased by 47,000 between the final quarter of 2002 and the first three months of 2003.

There appears to be little prospect of a sharp reversal in either employment levels or interest rates in the foreseeable future.

Commenting on the figures Martin Ellis, Chief Economist, said:

"House prices increased by 1.5% in May following April's 0.5% gain, a rise that is consistent with the strengthening in consumer confidence recorded since the end of the military conflict in Iraq.”

“A significant fall in the number of first-time buyers is moderating the overall pace of house price growth. A much stronger rise in house prices compared to average earnings in the recent past has resulted in a decline in the number of first-time buyers, with a fall of nearly a quarter between the first four months of 2002 and the same period this year as many people are now unable to borrow enough to buy their first home.”

“Annual house price inflation is forecast to fall from its current rate of 23% to 9% at the end of the year."