UK house prices remained largely unchanged in May, recording a marginal decline of 0.1%, equivalent to approximately £170 monthly, according to the latest report from Halifax.
On an annual basis, house prices experienced growth for the sixth consecutive month, rising by 1.5% compared to April’s 1.1% increase. The average property price now stands at £288,688.
“Market activity remained resilient throughout the spring months, supported by strong nominal wage growth and some evidence of an improvement in confidence about the economic outlook,” said Amanda Bryden, head of mortgages at Halifax. “This has been reflected in a broadly stable picture in terms of property price movements, with the average cost of a property little changed over the last three months.”
Bryden highlighted the benefits of a period of relative stability in both house prices and interest rates, suggesting it could boost confidence among buyers and sellers. “While homebuyers and those remortgaging will continue to respond to changes in borrowing costs, set against a backdrop of a limited supply of available properties, the market is unlikely to see huge fluctuations in the near term.”
Sam Mitchell, chief executive of estate agency Purplebricks, noted that the current climate of rising rates and the impending general election has introduced some uncertainty into the housing market. “However, as there are no housing ‘giveaways’ or unrealistic policies that can distort people’s expectations, the market seems to be continuing as if it is business as usual,” Mitchell said. He added that the prospect of increasing rates has motivated some buyers to act more swiftly.
Mitchell also pointed to the influence of newer mortgage providers who are maintaining their rates and offering more flexible products, particularly beneficial for first-time buyers. “We are seeing the property market continue on its road to recovery, with good stock coming to market and a sharp increase in viewings,” he noted. “What we need in the coming months is for the new government to focus on policies that will help people across the country get on the property ladder, through lower mortgage and interest rates, lower transaction costs, and lower rents.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, agreed that the looming general election is not deterring buyers and sellers. “That said, continued uncertainty as to when interest rates might start coming down and the cost of living is leading to some caution, with properties spending longer on the market and harder price negotiations,” she remarked.
First-time buyers, particularly in London, continue to struggle with raising deposits and increasingly rely on financial support from family, according to Reynolds. She emphasized that stabilizing prices would be especially beneficial for this demographic.
“Affordability certainly remains an issue and will continue to constrict buyer purchasing power,” added Ruth Beeton, co-founder of Home Sale Pack. “However, the outlook for the year ahead is a very good one all things considered.”