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Embargoed until 0700 30 May 2013

May 2013

Modest pick up in UK house prices in May

Price of a typical home increased by 0.4% in May and was 1.1% higher than May 2012 The typical UK home is now worth 167,912 May-13 331.1 0.4% 1.1% 167,912 Apr-13 329.9 0.0% 0.9% 165,586
Widespread expectations that the economy will continue to recover gradually in the quarters ahead, that interest rates will remain low, and the ongoing impact of policy measures aimed at supporting the availability and lowering the cost of credit, all provide reasons for optimism that activity will continue to gain momentum in the quarters ahead. However, progress is likely to be gradual and downside risks remain. While there are signs that economic activity is picking up, there has been some softening in the labour market, with employment growth appearing to run out of steam in the first quarter of the year. Moreover, while inflation has fallen back in recent months, pressure on household budgets remains intense, as wage growth has also decelerated. Indeed, in real terms (i.e. after taking account of inflation) average weekly wages have been falling for some time and are now back at the level prevailing in late 2003.
Average Weekly Pay in Real Terms
(, Re gular pay de flate d by CPI, e xpre sse d in 20 12 price s) 470 46 0 450 440 430 420 410 40 0 390 380 2005 2011 2008 2000 2006 2009 2004 2003 2002 2007 2010 2001 2013 2012

Headlines Monthly Index* Monthly Change* Annual Change Average Price

(not seasonally adjusted)

* Seasonally adjusted figure (note that monthly % changes are revised when seasonal adjustment factors are re-estimated)

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said:

House prices edged up by 0.4% in May, providing further support for the view that the housing market is gradually gaining momentum. The three month on three month measure of house prices, which is a smoother measure of the underlying trend, has been in positive territory since October last year. The annual rate of house price growth also ticked up to 1.1% in May - the fastest pace since November 2011. Its not just prices - a number of measures of housing market activity have also started to move higher. In the first four months of 2013 the number of property transactions was running at around 5% above the monthly average prevailing in 2012. The number of mortgage approvals for house purchase in the first quarter of 2013 was also around 4% above last years monthly average. A number of factors are likely to be contributing to the pick up in activity. There has been an improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures, such as the Funding for Lending Scheme. Indeed, mortgage rates have fallen back towards all time lows in recent months. With the UK returning to growth in the first quarter of 2013, the improvement in wider economic conditions may also be playing a role in boosting sentiment.

Source : ONS/Nationwide

Media enquiries to: Robert Gardner, Chief Economist, robert.gardner@nationwide.co.uk Mike Pitcher, 01793 657225, mike.pitcher@nationwide.co.uk

Monthly UK House Price Statistics

Monthly 3 Month Annual % % Change on 3 Change Seasonally Month % Adjusted Change May-11 0.1 0.9 -1.2 Jun-11 0.2 0.6 -1.1 Jul-11 0.4 0.5 -0.4 Aug-11 -0.8 0.2 -0.4 Sep-11 0.2 0.1 -0.3 Oct-11 0.2 -0.3 0.8 Nov-11 0.3 0.0 1.6 Dec-11 -0.3 0.2 1.0 Jan-12 -0.4 0.2 0.6 Feb-12 0.3 -0.2 0.9 Mar-12 -0.8 -0.6 -0.9 Apr-12 -0.2 -0.7 -0.9 May-12 0.2 -0.8 -0.7 Jun-12 -0.6 -0.7 -1.5 Jul-12 -0.7 -0.8 -2.6 Aug-12 1.1 -0.6 -0.7 Sep-12 -0.4 -0.4 -1.4 Oct-12 0.6 0.4 -0.9 Nov-12 0.0 0.5 -1.2 Dec-12 0.0 0.7 -1.0 Jan-13 0.5 0.4 0.0 Feb-13 0.2 0.6 0.0 Mar-13 0.1 0.7 0.8 Apr-13 0.0 0.5 0.9 May-13 0.4 0.4 1.1 Note: Historical figures including index levels can be viewed using the following link: www.nationwide.co.uk/hpi/datadownload Average Price 167,208 168,205 168,731 165,914 166,256 165,650 165,798 163,822 162,228 162,712 163,327 164,134 166,022 165,738 164,389 164,729 163,964 164,153 163,853 162,262 162,245 162,638 164,630 165,586 167,912

Media enquiries to: Robert Gardner, Chief Economist, robert.gardner@nationwide.co.uk Mike Pitcher, 01793 657225, mike.pitcher@nationwide.co.uk

12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0%

Annual percentage change in house prices

20 0 ,0 0 0 175,0 0 0 150 ,0 0 0 125,0 0 0 10 0 ,0 0 0 75,0 0 0 50 ,0 0 0

Average UK house price

May-11

May-05

May-13

May-11

May-12

May-10

May-08

2.0% 1.5% 1.0% 0 .5% 0.0% -0.5% -1.0% -1.5% -2.0%

Three months on previous three months % change

3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0%

Monthly % change (seasonally adjusted)

May-11

May-10

May-13

May-12

May-06

May-11

Nov-11

May-09

May-04

May-03

May-07

Aug-10

May-10

Nov-10

Nov-12

Aug-12

Feb-13

Feb-12

May-13
May-13 Feb-13

May-10

May-12

Nov-10

Nov-12

Aug-11

Feb-11

Aug-12

Feb-13

Feb-12

Nov-11

Aug-10

Nov-10

240,0 00 220,0 00 200,0 00 180 ,0 00 160 ,0 00 140 ,0 00 120 ,0 00 100 ,0 00 80 ,000 60 ,000 40 ,000 Q1 83

Long term real house price trend

Base : Q1 2013 Tre nd: 2.8% pe r annum Re al House Price Expon. (Re al House Price )

Aug-10

7.0 6.5 6.0 5.5 5.0 4.5 Long run ave rage 4.0 3.5 3.0 2.5 2.0 1983 1986 1989 1992 1995 1998 200 1 20 04 200 7 2010 20 13 Source : Nationwide , ONS

UK house price to earnings ratio

Q1 85

Q1 89

Q1 95

Q1 99

Q1 87

Q1 97

Q1 91

Q1 05

Q1 11

Q1 93

Notes
Indices and average prices are produced using Nationwide's updated mix adjusted House Price Methodology which was introduced with effect from the first quarter of 1995. The data is drawn from Nationwides house purchase mortgage lending at the post survey approvals stage. Price indices are seasonally adjusted using the US Bureau of the Census X12 method. Currently the calculations are based on a monthly data series starting from January 1991. Figures are recalculated each month which may result in revisions to historical data. The Nationwide Monthly House Price Index is prepared from information which we believe is collated with care, but no representation is made as to its accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue the whole or any part of the Index at any time, for regulatory or other reasons. Persons seeking to place reliance on the Index for their own or third party commercial purposes do so entirely at their own risk. All changes are nominal and do not allow for inflation. More information on the house price index methodology along with time series data and archives of housing research can be found at www.nationwide.co.uk/hpi

Media enquiries to: Robert Gardner, Chief Economist, robert.gardner@nationwide.co.uk Mike Pitcher, 01793 657225, mike.pitcher@nationwide.co.uk

Q1 09

Q1 03

Q1 07

Q1 01

Q1 13

Aug-12

Nov-12

Aug-11

Feb-11

Feb-12

May-12

Aug-11

Nov-11

Feb-11