The average price of a home across the UK right now – and why buyers are hitting pause
The latest Halifax House Price Index shows that UK house prices fell by 0.4% in May, with the average property now valued at £296,648.
However, prices were still up by 2.5% compared to this time last year, suggesting that while activity has slowed, the market remains surprisingly robust.
“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 at 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.”
Bryden noted that 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,” she said.
Northern Ireland, Wales and Scotland outpace the UK
Halifax’s data shows that 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.
By comparison, 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.
Why buyers are hitting pause
Following the end of the temporary stamp duty thresholds in April, the housing market saw a clear shift in momentum, says Holly Tomlinson, Financial Planner at Quilter.
Buyers rushed to complete transactions in March to avoid higher tax bills, but activity cooled noticeably in April, as shown by the Bank of England’s latest mortgage approval figures. Despite this drop in demand, house prices have not fallen off a cliff, she said.
“The fact that prices fell only modestly in May indicates that supply remains constrained and sellers have not yet been forced to adjust their expectations. However, with affordability still stretched and borrowing costs relatively high, the risk of a more prolonged slowdown cannot be ignored.
“Mortgage rates are edging down slightly, but for many buyers, this remains a far cry from the ultra-low rates of recent years. For those coming to the end of a fixed deal, the jump in monthly repayments can be significant, adding to the financial strain.”
Looking ahead, market confidence will likely hinge on the timing and pace of interest rate cuts, Tomlinson said.
“A more meaningful pick-up in buyer demand may not materialise until there is clearer evidence that mortgage costs are on a sustained downward path. For now, the market appears to be pausing for breath after a frenetic start to the year.”
