Halifax has issued a stark warning to approximately eight million households across the UK, including non-customers, as house prices experienced an unexpected monthly decline. The average UK home price fell by 0.1% in May, landing at £298,806, representing a £445 decrease compared to April. This marks the third consecutive monthly drop recorded by the lender.
Monthly Decline and Market Context
The average property price now stands at £298,806, down from £299,251 in April. This £445 month-on-month change reflects ongoing market volatility. Halifax's data highlights that around 7.3 million households own their home with a mortgage, accounting for approximately 29% of all UK households. The lender's warning extends beyond its customer base to all homeowners and potential buyers.
Expert Analysis
Amanda Bryden, Head of Mortgages at Halifax, commented: "Average house prices remained broadly stable in May, with a slight fall of -0.1% matching that seen in April. The typical property now costs £298,806, while the pace of annual growth edged up slightly to +0.5%." She attributed the trends to uncertainty linked to developments in the Middle East, higher inflation expectations, and elevated borrowing costs that continue to stretch affordability and temper demand.
Despite these challenges, Bryden noted that overall activity has held up well, reflecting the underlying resilience of the UK housing market. Transaction levels remain relatively stable, indicating that buyers and sellers are still active. Among first-time buyers, annual growth is more subdued at +0.3%, though lenders are offering increased support through flexible affordability checks and low-deposit options.
Marc von Grundherr, director of estate agent Benham and Reeves, described the market as "a marathon rather than a sprint, but buyers are still crossing the finish line." Mark Harris, chief executive of mortgage broker SPF Private Clients, added: "As swap rates continue to fall, lenders are trimming mortgage rates, which is helping ease affordability. However, the steadiness in house prices suggests buyers are still prepared to negotiate hard."
Outlook and Implications
Looking ahead, borrowing costs and consumer confidence are likely to shape activity in the coming months. House prices are expected to remain broadly stable while interest rates stay elevated. A return to sustained growth depends on an improvement in the inflation outlook and a fall in mortgage costs. First-time buyers may find encouragement in steady prices, as lenders work on solutions to help them enter the market.
