New figures have revealed that average house prices across Britain dipped slightly in May, showing a modest fall compared to the previous month.
According to the latest data, the typical property value dropped by £1,150, equating to a 0.4 per cent decrease. As a result, the average home now costs £296,648, down from £297,798 in April.
Despite this monthly decline, overall property values are still higher than they were a year ago. Prices have risen by 2.5 per cent over the past 12 months – an increase of more than £7,000. However, this annual growth rate has eased slightly, down from 3.2 per cent in April.
This slight monthly dip follows a small 0.3 per cent rise in house prices recorded in April, indicating a largely steady market.
Amanda Bryden, head of mortgages at Halifax, commented that these small monthly shifts reflect a stable housing market. She noted that since the start of the year, average prices have edged down by just 0.2 per cent overall.
Bryden also pointed out that while house prices remain high compared to average incomes, affordability continues to be a key concern for many prospective buyers. However, she added that declining mortgage rates and ongoing wage growth have helped maintain buyer confidence.
From April, changes to stamp duty introduced by Rachel Reeves last year have come into effect, reducing the level of relief available to certain homebuyers. It’s important to note that stamp duty is applicable in England and Northern Ireland.
Where have house prices risen most?
House prices across Northern Ireland, Wales and Scotland are increasing at a faster rate than most regions in England, according to Halifax.
Northern Ireland continues to lead the way, showing the strongest annual rise in property prices. Values there have jumped by 8.6 per cent over the past year, bringing the average home price to around £209,377. Despite this growth, prices in Northern Ireland remain below the UK national average.
Wales and Scotland also saw solid gains, both recording annual price increases of 4.8 per cent in May. The average property in Wales is now valued at £230,405, while in Scotland, the typical price stands at £214,864.
In England, the North West and Yorkshire and the Humber were among the top-performing regions. Both saw house prices climb by 3.7 per cent year-on-year, with average values now at £240,823 and £213,983 respectively.
In contrast, growth in the South East has been more subdued, with property prices rising by just 1.8 per cent over the past year to an average of £391,253. London has seen the smallest increase, with house prices up only 1.2 per cent annually. However, the capital remains the most expensive area in Britain, with average prices reaching £542,017.
Andrew Montlake, chief executive of mortgage broker Coreco, told Newspage that despite slight price drops, the market overall remains active. He highlighted that the resilience of house prices continues to be a defining feature of the UK property landscape.
Montlake acknowledged that affordability remains an issue for many, but noted that lenders are beginning to take steps to ease these pressures. He added that future movements in inflation and the upcoming Monetary Policy Committee meeting will be closely watched.
Jeremy Leaf, a North London estate agent, pointed out that the surge in property transactions ahead of the stamp duty changes earlier in the year is still affecting market activity. He observed that many homes made available during that rush remain unsold, which is contributing to a cooling in prices.
Even so, Leaf stressed that deals are still happening when both buyers and sellers are realistic about pricing. He also noted that strong employment figures are helping to support confidence in the market, even as broader economic concerns persist.
Looking ahead, the direction of house prices will likely depend on several factors, including how quickly interest rates are cut, whether wages continue to grow, and how inflation develops in the coming months.
Interestingly, Halifax’s findings differ from those reported by Nationwide earlier this week. Nationwide’s latest index showed a 0.5 per cent month-on-month increase in prices during May, following a 0.6 per cent fall in April.
Craig Fish, director at Lodestone, said the difference between the two reports may be confusing for the public. However, he urged people to look at the broader trend. House prices may fluctuate month to month, but overall, they tend to move upward over time.
Fish emphasised the ongoing housing shortage as a key reason why demand remains high. He advised buyers not to wait for interest rates to drop, as future conditions are uncertain. His message to those considering a purchase: choose a mortgage that suits your situation, take the plunge, and think long-term.
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