"These small monthly movements point to a housing market that has remained largely stable, with average prices down by just -0.2% since the start of the year."
- Amanda Bryden - Halifax
UK house prices edged down slightly in May, falling by -0.4% compared to a +0.3% rise the previous month. The average property price now stands at £296,648, down from £297,798 in April, according to this morning's data from Halifax.
The annual rate of house price growth also eased, slowing to +2.5% from April’s +3.2%. Despite this dip, prices have remained broadly stable through the first half of the year.
Regional differences widen
House price trends varied sharply across the UK, with some regions continuing to show strong annual growth while others saw more modest gains.
Northern Ireland posted the highest yearly increase once again, with prices rising by +8.6%. The average property there now costs £209,388, well below the UK-wide figure, but growth remains notably stronger than elsewhere.
Scotland and Wales followed with annual growth of +4.8%. Average prices in these nations reached £214,864 and £230,405 respectively.
In England, the North West and Yorkshire and the Humber recorded the fastest regional growth, both at +3.7% over the year. Property values in these areas now average £240,823 and £213,983.
London, meanwhile, continued to show slower momentum. Prices in the capital rose by just +1.2% annually. Even so, the city remains the most expensive part of the UK housing market, with the typical home now priced at £542,017.
“Average UK house prices fell by -0.4% in May – a drop of around £1,150 – following a modest rise in April. Over the past 12 months, prices have grown by +2.5%, adding just over £7,000 to the value of a typical home, which now stands at £296,648," comments Halifax head of mortgages Amanda Bryden. “These small monthly movements point to a housing market that has remained largely stable, with average prices down by just -0.2% since the start of the year. The market appears to have absorbed the temporary surge in activity over spring, which was driven by the changes to stamp duty.
She added, “Affordability remains a challenge, with house prices still high relative to incomes. However, lower mortgage rates and steady wage growth have helped support buyer confidence.
“The outlook will depend on the pace of cuts to interest rates, as well as the strength of future income growth and broader inflation trends. Despite ongoing pressure on household finances and a still-uncertain economic backdrop, the housing market has shown resilience – a story we expect to continue in the months ahead.”
Industry reaction
Professor Joe Nellis, co-creator of the Halifax House Price Index and economic adviser at MHA, said, "The Halifax House Price Index has recorded a surprising 0.4% dip in UK house prices in May.
"However, year-on-year growth remains strong, with the annual growth rate coming in at 2.5%. This comes as rising wages are pushing affordability up and greater competition in the mortgage market is leading to more favourable rates."
"This growth is set to continue as huge demand for houses persists in the UK. This is something that the Government has recognised, setting an ambitious target to build 1.5 million new homes by 2029, but recent estimates suggest that this is looking overly optimistic,"
He added, "One thing to consider over the next year is the Renters’ Rights Bill introduced to Parliament by Angela Rayner in her role as Secretary of State for Housing. Expected to pass in the Autumn, this Bill will provide greater protection for tenants and impose new restrictions on landlords, including ending ‘no fault’ evictions,"
"These new restrictions could disincentivise landlordism, encouraging the sale of rental properties and increasing supply, or discouraging potential landlords from buying properties and reducing demand. Both scenarios would apply downward pressure on prices and provide some respite for would-be homeowners,"
Tom Bill, head of UK residential research at Knight Frank, commented, “Demand was frontloaded this year thanks to April’s stamp duty deadline, which means house prices are coming under downward pressure as buyers still in the market have a lot to choose from.
"While activity will eventually pick up, concerns around inflation and the government’s tight financial headroom mean mortgage rates don’t feel poised to drop meaningfully. We expect UK growth of 3.5% in 2025, which suggests the direction of travel for prices will be largely sideways.”
Nathan Emerson, CEO of Propertymark, said, “This slight dip in house prices will likely have been influenced as a direct consequence to the current state of the global economy. There will always be a need for people to move house regardless of international trading relations; however, many aspiring or current homeowners will no doubt be discouraged until they feel confident in their long-term affordability.
“It would be very welcome news for consumers if lenders do feel confident enough to offer additional competitive mortgage products across the summer months, but much will depend on the rate of inflation across the coming months.”
Matt Thompson, head of sales at Chestertons, says, “Some house hunters paused their search amid the Easter holidays in April but were quick to resume their activity in May. Buyer motivation was then boosted further by the Bank of England’s decision to cut interest rates to 4.25%.
"As the majority of sellers have been eager to move themselves, there has been a steady flow of agreed sales in May and, as buyer demand remains strong, we expect a busier than usual summer market.”
Jason Tebb, President of OnTheMarket, comments, “Although the stamp duty concession and the impetus it brought is behind us, the housing market continues to demonstrate remarkable resilience, shaking off external economic concerns.
"Recent base rate cuts have been fundamental in boosting confidence and activity. Further rate reductions from the Bank of England will provide much-needed stimulus for the market as the year progresses.
"As property prices remain relatively steady, affordability continues to impact what buyers are able or willing to pay. Relaxing of criteria by lenders following recent guidance from the Bank may enable borrowers to take on bigger mortgages but evidence suggests that for now at least they remain sensitive on price.”
