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House prices up 2.6% in year to May, despite three months of falls

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Property prices dipped again last month as a result of the global pandemic, but they remain higher than this time last year
House prices up 2.6% in year to May, despite three months of falls

Average UK house prices fell by 0.2% in May to £237,808, according to Halifax – the third month in a row that prices have fallen.

However, the lender noted that average property prices are still 2.6% higher than 12 months ago and activity started to pick up in May compared to April.

It also highlighted the fact that, with fewer transactions, it is more difficult to work out average house prices and more volatility is to be expected in the monthly index.

Russell Galley, managing director of Halifax, said: “The mid-month relaxation of restrictions in England, allowing estate agents and conveyancers to restart operations, brought much-needed positive news with some advance indicators of buyer and seller interest quickly showing signs of improvement. This is likely to provide a short-term boost as buyers and homeowners attempt to kick-start transactions that had previously been put on hold.

“Looking ahead, we expect market activity to increase progressively as restrictions are eased further across the whole of the UK and we continue to have confidence in the underlying health of the housing market over the long-term.”

Shaun Church, director at mortgage broker Private Finance, added: “Lockdown’s strict measures have caused activity in the housing market to seize up, resulting in a momentary dip in pricing.

“Buyers are worried their financial position might deteriorate in the future. As a result, they’re pulling back from the market.

“Growing job insecurity and sharp reductions in income due to a drop in working hours or enforced salary cuts has left some consumers under intense financial strain. This has resulted in buyers delaying purchases until they have clearer visibility over the next year.”

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