The average UK house price surged 2.5% in the year to May, according to fresh data released by Halifax.
However, while the annual growth rate remained reasonably strong, there was some weakness month on month with prices falling 0.4% in the month to May. The annual growth rate fell to 2.5% from 3.2% in the previous month.
The average UK house price is now £296,648.
“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,” said Amanda Bryden, Head of Mortgages, Halifax.
“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.”
Looking forward to the rest of the year, analysts see a housing shortage and potential Bank of England rate cuts supporting prices.
“Today’s data underscores the continued resilience and appeal of the UK property sector. Despite elevated inflation and stubborn borrowing costs, we welcome the BoE’s recent rate cut as a hopeful first step in a much-needed easing cycle,” said Tom Brown, Managing Director, Real Estate at Ingenious.
“There’s clearly a significant and notable shortage of housing inventory across various price brackets and locations. Consequently, any decline in homeowner sales is likely counterbalanced by increased demand from renters and investors. This is a trend that is not going away.”