UK house prices bounce back in May, says Nationwide

Over the year to May, house prices rose by 1.3%, said Nationwide. That compares to 0.6% growth in the 12 months to April.

The building society said that consumer confidence had “improved noticeably over the last few months, supported by solid wage gains and lower inflation”.

The Bank of England will announce its next interest rate decision on 20 June. It has kept borrowing costs at 5.25% since last year. The Bank has a target to keep inflation at 2%.

Mr Harvey said that while headline inflation has been slowing – down to 2.3% in the year to April – “it is a complicated picture”.

One measure of inflation that the Bank of England looks at when it considers rate cuts is the services sector, which includes areas such as education and hospitality and gives a snapshot of pay growth and unemployment numbers.

That measure of inflation has failed to slow as much as the headline figure, dipping only marginally to 5.9% in April.

Mr Harvey said: “Some of the underlying pressures of price inflation, such as in the services sector, they are still stubbornly high.

“That is one of the reasons that the Bank of England are perhaps not quite ready to cut interest rates just yet because those pressures are still there and they are still very aware of the impact they could have.”

In compiling its figures, Nationwide looks at its own mortgage lending and does not include cash buyers or buy-to-let deals.

Cash buyers account for about a third of housing sales.