Annual house prices fall in May for first time since 2012 - Halifax
By Michele Maatouk
Date: Wednesday 07 Jun 2023
(Sharecast News) - Annual house prices fell in May for the first time since 2012 amid surging mortgage costs, according to data released on Wednesday by Halifax.
House prices declined 1% on the year following 0.1% growth in April.
On the month, prices were flat in May following a 0.4% decline the month before, and the average price now stands at £286,532.
Halifax said house prices in the south of England remain under the greatest pressure.
Kim Kinnaird, director, Halifax Mortgages, said: "As expected the brief upturn we saw in the housing market in the first quarter of this year has faded, with the impact of higher interest rates gradually feeding through to household budgets, and in particular those with fixed rate mortgage deals coming to an end.
"With consumer price inflation remaining stubbornly high, markets are pricing in several more rate rises that would take Base Rate above 5% for the first time since the start of 2008. Those expectations have led fixed mortgage rates to start rising again across the market.
"This will inevitably impact confidence in the housing market as both buyers and sellers adjust their expectations, and latest industry figures for both mortgage approvals and completed transactions show demand is cooling. Therefore further downward pressure on house prices is still expected.
"One continued source of support to house prices is the labour market. While unemployment has recently ticked up from very low levels, brisk wage growth would over time help to improve housing affordability, if sustained."
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