British house prices rose in May after a two-month decline, demonstrating the property market's resilience despite high borrowing costs, according to mortgage lender

Nationwide.

Data released by Nationwide on Friday indicated that house prices increased by 0.4% from April. This surpassed economists' expectations, who had predicted a modest 0.1% monthly rise in a Reuters poll.

Compared to May of the previous year, house prices were up by 1.3%, exceeding the median forecast of a 0.8% gain from the same poll.

Robert Gardner, Nationwide’s chief economist, commented on the market's performance: "The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer-term interest rates in recent months. Consumer confidence has improved noticeably over the last few months, supported by solid wage gains and lower inflation."

The housing market in the UK had slowed down in 2023 as the Bank of England raised interest rates to their highest levels since 2008. However, the expectation of lower borrowing costs has recently helped to reduce mortgage rates and revive market activity.

A Reuters poll of housing market analysts published on Thursday projected that property prices in Britain would increase by 1.8% in 2024, aided by faster wage growth making homes more affordable.

Nationwide also noted that the upcoming national election on July 4 is unlikely to significantly impact the housing market in the short term. Historical data suggests that broader economic trends have typically overshadowed immediate election-related effects.