Average UK house price dipped by 0.1% in May amid global uncertainty – Halifax

UK Property Market Records Modest Monthly Decline

The average UK house price edged down by 0.1% month-on-month in May, according to the Halifax index. Across the UK the average property price stood at £298,806, marking a 0.5% annual increase. Halifax reported the figures this week, highlighting how price trends continue to reflect uncertainty linked to developments in the Middle East.

The modest dip comes against a backdrop of elevated borrowing costs that have stretched affordability for many buyers. Despite recent cuts to mortgage rates, higher inflation expectations have kept costs above levels seen at the start of the year. Halifax data shows transaction levels remain relatively stable, suggesting buyers and sellers are still moving despite the pressures.

Halifax Links Price Movement to Global Events

Amanda Bryden, head of mortgages at Halifax, stated that property price trends continue to reflect the uncertainty linked to developments in the Middle East. She noted that overall activity has held up well, reflecting the underlying resilience of the UK housing market. Latest industry figures show transaction levels remain relatively stable, indicating that committed movers are still transacting even as wider global factors weigh on sentiment.

Bryden emphasised that the housing market remains closely tied to wider global developments. A return to sustained house price growth would depend on an improvement in the inflation outlook and a fall in mortgage costs. The bank’s assessment places the May reading within a pattern of broadly stable prices while interest rates stay elevated.

Mortgage Experts Assess Affordability and Demand

Mark Harris, chief executive of mortgage broker SPF Private Clients, observed that swap rates which underpin the pricing of fixed-rate mortgages continue to fall. Lenders have trimmed mortgage rates accordingly, helping ease affordability. The steadiness in house prices suggests buyers are still prepared to negotiate hard and are not willing to pay over the odds, he said.

First-time buyers will be encouraged as house prices remain steady rather than soar, Harris added. Karen Noye, a mortgage expert at wealth manager Quilter, pointed out that seasonally this is typically a period where activity holds up reasonably well. Momentum can become more uneven as the summer progresses, she warned, with attention shifting from new homes to holidays.

Industry Bodies Note Selective Buyers and Stable Transactions

Iain McKenzie, chief executive of The Guild of Property Professionals, confirmed that committed movers are still transacting. Nathan Emerson, chief executive of property professionals’ body Propertymark, said buyers are becoming more selective. Professional guidance is increasingly important in helping transactions progress smoothly, he observed.

These assessments align with Halifax findings that activity has held up well. The combination of stable transaction volumes and selective buyer behaviour points to a market adjusting to higher borrowing costs without a sharp contraction in volume. Local estate agents across England and Wales report similar patterns of measured demand.

Outlook Remains Dependent on Inflation and Rate Paths

Amanda Bryden concluded that borrowing costs and consumer confidence are likely to continue shaping activity in the coming months. House prices are expected to be broadly stable while interest rates stay elevated. The housing market’s performance will stay closely linked to wider global developments, including inflation trends that influence mortgage pricing.

Karen Noye highlighted that a further softening in demand often occurs through July and August as the holiday season takes hold. The combination of these seasonal factors with ongoing global uncertainty suggests the market will continue to move in a cautious manner through the summer period.