The UK housing market remained relatively stable in May, with minimal fluctuations in house prices. According to the latest Halifax House Price Index, the average house price stands at £288,688, a slight decrease of £170 from April. This 0.1% monthly dip is a continuation of the market’s steady performance, reflecting resilience amid economic uncertainties.

Key Highlights

1. Monthly and Quarterly Changes:

• Monthly Change: House prices edged down by -0.1%.
• Quarterly Change: There was a -0.3% decline.

1. Annual Growth:

• Annual Change: House prices increased by +1.5%, up from +1.1% in April.

1. Regional Performance:

• The North West showed the strongest growth with house prices rising by +3.8% annually, bringing the average price to £232,258.
• Northern Ireland continued its strong performance with a +3.2% annual increase.
• Scotland saw a +1.9% rise in house prices, now averaging £204,952.
• In Wales, the annual growth rate was +0.7%, with an average house price of £219,483.
• Eastern England experienced the largest decline, with a -0.8% drop in annual growth, averaging £329,853.
• London remains the most expensive region, with an average house price of £536,821, reflecting a marginal annual increase of +0.2%.

Market Insights from Halifax

Amanda Bryden, Head of Mortgages at Halifax, commented on the market’s performance:

“UK house prices were largely static in May, edging down slightly by -0.1% or around £170 in cash terms. On an annual basis, house prices rose for a sixth consecutive month, up by +1.5% vs +1.1% in April. The average property price now stands at £288,688.”

She further noted:

“Market activity remained resilient throughout the spring months, supported by strong nominal wage growth and some evidence of an improvement in confidence about the economic outlook. This has been reflected in a broadly stable picture in terms of property price movements, with the average cost of a property little changed over the last three months.”

Bryden highlighted the importance of stability in both house prices and interest rates, stating:

“A period of relative stability in both house prices and interest rates should give a degree of confidence to both buyers and sellers. While homebuyers and those remortgaging will continue to respond to changes in borrowing costs, set against a backdrop of a limited supply of available properties, the market is unlikely to see huge fluctuations in the near term.”

Historical Data Trends

Examining the historical data from May 2023 to May 2024, the Halifax House Price Index shows fluctuations in the average house prices and the percentage changes:

• May 2023: £284,477 (-1.8% annual change)
• December 2023: £287,244 (+1.8% annual change)
• May 2024: £288,688 (+1.5% annual change)

These figures illustrate the market’s resilience and gradual recovery over the year, despite occasional dips.

Conclusion

The UK housing market in May demonstrated stability with a slight decrease in prices. The annual growth rate continues to be positive, reflecting a steady demand and a resilient market. Regional variations highlight the diverse performance across the UK, with the North West leading in growth. As the market navigates economic uncertainties, the period of relative stability offers a reassuring outlook for both buyers and sellers.

Stay tuned for more updates on the UK housing market and other financial insights. If you have any questions speak to our investor team