Average UK house prices fell by -0.4% in May – a drop of around £1,150 for a typical home – 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.
The data comes from the latest house price index produced by Halifax, whose head of mortgages, Amanda Bryden, says: “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.
“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.”
In response to the data Jeremy Leaf, a north London estate agent and a former RICS residential chairman, says: “The significant number of purchases brought forward to take advantage of the stamp duty holiday ending in March is still having a negative impact on activity now. Most of the stock made available at that time, if not sold or under offer, is still available so the inevitable result is a softening in prices.
“However, sales are still proceeding where buyers and sellers are most realistic, with confidence supported by a relatively strong employment picture outweighing economic concerns both here and abroad.”
Tom Bill, head of UK residential research at Knight Frank, suggests this relatively unspectacular market sentiment might be the story of the rest of 2025.
He says: “Demand was frontloaded 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.”
And Jason Tebb, president of property portal OnTheMarket, adds: “Recent base rate cuts have been fundamental in boosting confidence and activity. Further rate reductions from the Bank of England will provide much-needed stimulus for the market as the year progresses.
“As property prices remain relatively steady, affordability continues to impact what buyers are able or willing to pay. Relaxing of criteria by lenders following recent guidance from the Bank may enable borrowers to take on bigger mortgages but evidence suggests that for now at least they remain sensitive on price.”
