The average price of a UK home was 1.5 per cent higher than a year ago, according to an index from Britain’s biggest mortgage provider.
The typical property now costs £288,688, a slight fall on the £288,862 recorded in April this year.
From month to month, house prices stayed relatively stable, Halifax’s house price index (HPI) showed, with the average UK house price falling by 0.1 per cent, or around £170 in cash terms, in May, compared to April.
There has been large regional variation, with prices rising 3.8 per cent in the past year in the north-west of England, but falling 0.8 per cent in the East of England.
Amanda Bryden, head of mortgages, Halifax, said: “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.
“A period of relative stability in both house prices and interest rates should give a degree of confidence to both buyers and sellers.
“While home buyers 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.”
Some experts suggested people may be waiting to see what happens in the election before deciding to buy or sell.
Nathan Emerson, chief executive at property professionals’ body Propertymark, said: “With a general election now on the horizon, there may be potential caution from buyers and sellers, especially those hoping to step onto the housing ladder for the first time.”
Interest rates – which have a large bearing on mortgage costs – have remained on hold at 5.25 per cent since last summer.
In 2023 there was an expectation they could fall by now, which would probably have led to lower mortgage rates and boosted housing affordability, but this has not materialised.
Higher mortgage rates generally limit the capacity for significant house price rises because they quash affordability of higher borrowing.
Verona Frankish, chief executive of online estate agent Yopa, said that when a Bank of England base rate cut “does materialise, we expect the current rate of house price growth to accelerate”.
Those looking to buy or remortgage their property are advised to plan ahead.
Alice Haine, a personal finance analyst at Bestinvest by Evelyn Partners, said: “Buyers should remember they can lock in a mortgage deal up to six months ahead of the start of their mortgage term, with the option to switch to a better rate should it come along in the meantime.”
Despite concerns house price growth is not improving as much as hoped, housebuilder Bellway said falling inflation and improving consumer confidence helped push its sales up this spring compared to 2023.
The firm said the net private reservation rate – the number of people putting their names down for a new home – at its active outlets had risen to 0.62 during the four months to 2 June, compared to 0.58 for the same period in 2023.
It said the higher demand was down to an “improvement in affordability, driven by a moderation of both mortgage interest rates and consumer price inflation and an increase in wages”, in a trading update.
Jason Honeyman, Bellway chief executive, said: “Bellway has delivered a solid trading performance supported by improved affordability and a seasonal uplift through the spring, and we remain on track to deliver full year volume output of around 7,500 homes.
“We have been encouraged by ongoing healthy levels of customer interest and combined with the strength of our outlet opening programme, we continue to expect a year-on-year increase in the forward order book at 31 July, 2024.”
