UK house prices slump by £1,150 – but millions now ‘confused’ | Personal Finance | Finance

Average house prices in the UK fell by around £1,150 or 0.4% month-on-month in May, according to a leading index.

Property prices now average £296,648, compared to £297,798 last month, Halifax has said. But, despite the monthly price drop, property values are still more than £7,000 higher than last year, Halifax said. May’s month-on-month price fall follows a 0.3% increase in April. Amanda Bryden, head of mortgages at Halifax, said: “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.”

Stamp duty relief was temporarily increased by the Conservative Government, raising the nil-rate threshold to £250,000 for general buyers and £450,000 for first-time buyers to boost property sales.

This discount ended on March 31, reducing the tax-free thresholds to pre-COVID levels of £125,000 and £300,00, respectively.

In signs of the stamp duty cliff edge, figures recently published by HM Revenue and Customs (HMRC) showed an estimated 64,680 house sales took place in April, 64% lower than the 177,440 transactions reported in March.

Ms Brydon continued: “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.”

Halifax’s data shows house price growth across Northern Ireland, Wales, and Scotland continues to outpace English regions.

Northern Ireland once again recorded the fastest pace of annual property price inflation, up by 8.6% over the past year. The typical home now costs £209,388, though prices remain well below the UK average.

Wales and Scotland also posted strong annual growth of 4.8% in May. Average prices now stand at £230,405 and £214,864 respectively.

Among the English regions, the North West and Yorkshire and the Humber lead the way, both showing annual house price growth of 3.7%. Average property values in these areas are now £240,823 and £213,983 respectively.

In contrast, London continues to see more subdued growth, with prices rising by just 1.2% year-on-year. However, the capital remains by far the most expensive part of the UK housing market, with the average home now priced at £542,017.

Halifax’s latest report contrasts with the findings from Nationwide Building Society’s latest house price index, released on Monday this week. Rather than a slump, Nationwide said that property values had increased by 0.5% month-on-month in May, following a 0.6% fall in April.

Craig Fish, director at Lodestone said: “Halifax is reporting price falls whilst Nationwide reports price increases. This conflicting data is very confusing to the general public. The key is to understand that there will always be fluctuations in house prices, but with one general direction overall, and that’s up. Until the housing shortage is fixed, property will always be in demand.”

Tom Bill, head of UK residential research at Knight Frank, said: “Demand was front-loaded this year thanks to April’s stamp duty deadline, which means house prices are coming under downwards 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.”

Here are average house prices and the percentage annual increase, according to Halifax.

The regional annual change figures are based on the most recent three months of approved mortgage transaction data:

• East Midlands, £244,754, 2.8%
• Eastern England, £334,720, 1.6%
• London, £542,017, 1.2%
• North East, £175,174, 2.0%
• North West, £240,823, 3.7%
• Northern Ireland, £209,388, 8.6%
• Scotland, £214,864, 4.8%
• South East, £391,253, 1.8%
• South West, £304,519, 1.1%
• Wales, £230,405, 4.8%
• West Midlands, £260,118, 3.0%
• Yorkshire and the Humber, £213,983, 3.7%