Average UK house price drops by over £1,000 in a single month

The average price of a UK home saw a decline of £1,150, or 0.4 per cent, between April and May, according to Halifax.

Despite the monthly dip, property values have increased by over £7,000 in the last year, the company said. The drop in May follows a 0.3 per cent increase the previous month.

The annual rate of house price growth also slowed to 2.5 per cent in May, from 3.2 per cent in April.

Halifax's latest report contrasts with Nationwide Building Society’s index, which stated that property values had increased by 0.5 per cent between April and May, following a 0.6 per cent fall the previous month.

Amanda Bryden, head of mortgages at Halifax, said: “Average UK house prices fell by 0.4 per cent 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 per cent, adding just over £7,000 to the value of a typical home, which now stands at £296,648.

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“These small monthly movements point to a housing market that has remained largely stable, with average prices down by just 0.2 per cent 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.”

In April, stamp duty discounts became less generous for some home buyers. According to figures published by HM Revenue and Customs (HMRC), an estimated 64,680 house sales took place in April – 64 per cent lower than the 177,440 transactions reported in March.

Tom Bill, head of UK residential research at Knight Frank said: “Demand was front-loaded 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.

House price growth across Northern Ireland, Wales and Scotland has been outpacing regions in England, Halifax said.

In London, house prices have increased by just 1.2 per cent year-on-year, the report said.

But Halifax said that London remains the most expensive part of the UK housing market, with the average home priced at £542,017.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The cheapest fixed-rate mortgages have started rising again with the trajectory of swap rates, which underpin their pricing, suggesting further mortgage rate increases in the short-term.

“However, rates are only part of the picture. The easing of criteria and changes to mortgage stress tests by lenders such as Nationwide and NatWest, following changes to Bank of England guidance in March, means tens of thousands of pounds of extra borrowing may now be available to buyers.

“This will boost affordability, enabling more borrowers to get on the housing ladder in coming months.”

Here are average house prices and the percentage annual increase, according to Halifax. The regional annual change figures are based on the most recent three months of approved mortgage transaction data: