House prices bounced back from a lacklustre April this month, but there is little sign of the property market shaking off its current torpor, building society Nationwide said today.
Its latest index registered a 0.3% rise in prices to £167,208 in May - after a 0.2% decline the previous month - but chief economist Robert Gardner added the most likely movement in prices was "sideways" in a fragile economic climate.
He said: "The pattern of the recovery also argues against a strong bounce in property prices.
"Business investment and net trade are expected to drive the economy in the quarters ahead, rather than consumer spending.This will eventually feed through to boost households and support the housing market... but it will take time for the feel-good factor to emerge and for households to bolster their finances."
Average prices now stand 1.2% below a year ago although some markets - such as London and the South-East - have proved more resilient than other areas of the UK.
IHS Global Insight's Howard Archer warned: "Persistently high unemployment, elevated debt levels and still significant difficulties in getting a mortgage - particularly for first time buyers - do not bode well for house prices."
Read More
MORE ABOUT