House prices fall for the third month in a row
Key Points
- Average house prices in the UK have fallen for the third month in a row as affordability is stretched.
- Halifax attributes the decline to uncertainty over inflation and the impact of the conflict in the Middle East.
- House price growth varies regionally, with Northern Ireland recording strong growth of 7.8% and the South East of England seeing house prices fall by 2.1%.
- Getting on the property ladder remains a struggle for first-time buyers, but new lending rules offer additional support.
House prices in the UK have continued to fall, declining for the third month in a row as uncertainty over inflation stretches affordability.
The latest house price data from Halifax reveals that the average property in the United Kingdom is now priced at £298,806, down 0.1% from April.
This continues a trend of house prices decreasing on the back of the conflict in Iran and concerns over its implications for the global economy.
House prices in the UK have been edging downwards each month since February, as shown in the graph below.
House prices in the UK vary greatly depending on region. While an average national decline of 0.1% does not seem significant, looking at specific regions of the country paints a more informative picture.
In the South East and London, where properties are generally more expensive and affordability is stretched, house prices are falling much more quickly. In the South East of England, house prices have fallen by 2.1% year-on-year, while in London they have fallen by 1.5%.
In contrast, house prices in Scotland have risen by 3.8% annually, while the average price of a home in Northern Ireland has shown strong year-on-year growth of 7.8%.
Still a struggle for first-time buyers
While declining house prices may be good news for prospective buyers, it still remains difficult for people in the UK to get onto the housing ladder.
Annual house price growth among first-time buyers grew by just 0.3%, more subdued than overall year-on-year market growth of 0.5%.
“While getting onto the property ladder remains a big challenge, there has been increasing support from lenders, including more flexible affordability checks and a growing range of low-deposit options,” said Halifax Head of Mortgages Amanda Bryden.
“Property price trends continue to reflect the uncertainty linked to developments in the Middle East.”
“Despite recent cuts to mortgage rates, higher inflation expectations have kept borrowing costs above the level seen at the start of the year, continuing to stretch affordability for many buyers and temper demand,” she said.
“The housing market remains closely tied to wider global developments, with a return to sustained house price growth dependent on an improvement in the inflation outlook and a fall in mortgage costs.”
