House prices increase in May as London is set for a hike

House prices increased by 0.3% in May from April, according to Nationwide's House Price Index. Prices are up 0.6% on the previous three months but 1.2% down on May 2010. Robert Gardner, Nationwide's chief economist, says: "House prices increased by 0.3% in May, only just offsetting the 0.2% fall recorded the previous month, and leaving prices 1.2% below the level prevailing in May 2010. "

Meanwhile estate agents and brokerage Savills has revised its forecast for house prices in London. It had originally predicted house prices in the capital would fall by 1% in 2011 but now predicts a rise of 8%. The new figures are based on strong demand from overseas buyers.