UK property website Rightmove claims that house prices have risen slower in May than in April – a sign that things could be levelling out.

House prices went up 2.6% in April and only 0.7% in May according to Rightmove, indicating that things could be cooling off.

In the week before the General Election there was a huge influx in the number of new sellers, the biggest in fact since June 2008. However on the flip, there was a sharp rise in the number of unsold properties, due to a lack of mortgage financing options for buyers, especially first time buyers.

Despite the dip in housing prices, the unavailability of mortgage products means that few are able to get onto the property ladder. Sellers are reducing asking prices, but it is not enough to bring back the volumes needed to restore the housing market.

The London housing market took a different turn this month with a 0.4% dip in asking prices. The market here is more affected by overseas buyers and ‘financial sector cash bonuses’, so this was the first fall since December.

Rightmove has a good overview of the market with around 90% of properties for sale in Britain going through the website. Only the next few months will give a clear indication of exactly which path the UK housing market will take.

The UK’s largest building society Nationwide, says that it believes that the UK property market will remain pretty stable over the forthcoming 6 to 12 months.

According to Nationwide, the pressure on property prices is decreasing as new properties enter the market.  They also predict that the UK base rate will not increase during the rest of 2010.  If this is the case, then interest rates should remain at a steady 0.5%.  In turn this should increase liquidity in the mortgage market and help to get the property market flowing.

With the UK property market finally picking up, is it only about to get another kick in the teeth?  The debt problems facing Europe could have a major impact on the UK economy and the longer that the issues persist, the more likely this is to happen, so perhaps we aren’t out of the woods yet.

With new mortgage products coming onto the market all of the time, it is worth investigating what your options are now.