U.K.'s house price index rose 0.5% month-on-month in May, the Nationwide Building Society said Thursday. Prices rose for a third straight month. Economists had forecast 0.3% growth.
In April, prices rose 1%.
On an annual basis, the pace of growth eased to 9.8% from 10.5%. However, it was better than the 9.6% rise economists have anticipated. Prices have been rising since October last year on an annual basis.
"Housing market conditions remain characterised by thin transaction volumes and a relative scarcity of properties for sale, despite a slow return of more sellers in recent months," said Martin Gahbauer, Nationwide's chief economist.
The average price of a U.K. property in May was GBP 169,162, the building society said.
"The reduced house price rise in May reported by the Nationwide - following on from the Bank of England reporting that mortgage approvals remained muted at 49.871 in April - fuels our doubts that house prices will be able to make significant further gains over the coming months," said Howard Archer, Chief U.K. Economist at IHS Global Insight.
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