U.K. property prices fell marginally in May, according to a report that predicted the shortage of homes for sale will push up values in the coming months.
The average cost of a home fell 0.1 from April, when it jumped 1.6 percent, mortgage lender Halifax, a division of Lloyds Banking Group Plc, said on Thursday. House prices were 6.9 percent higher than in May 2014 at 196,067 pounds ($300,000.)
Housing analysts expect the market to pick up after the May 7 general election delivered a surprise decisive Conservative victory. The Labour opposition had pledged to increase taxes on the most expensive homes. Data this week showed mortgage approvals at the highest level in more than a year.
“The imbalance between supply and demand is likely to continue to push up house prices over the coming months,” Martin Ellis, an economist at Halifax, said in a statement. “Looking further ahead, the increasing level of house prices in relation to earnings is expected to dampen house-price growth.”
Property values have been buoyed by an improving labor market, while competition for market share has led banks to cut mortgages rates to record lows. The Bank of England will keep its benchmark rate at 0.5 percent on Thursday, economists say.
On a less-volatile quarterly basis, property prices rose 2 percent from the previous three months and were 8.6 percent higher than a year earlier, Halifax said.