Annual house price growth has turned negative for the first time since 2012 in May, according to an index. Across the UK, house prices fell by 1.0%, Halifax said.
It marked the first annual decline in house prices since December 2012. The average house price remained flat (0.0% growth) month-on-month in May, sitting at £286,532.
Kim Kinnaird, Director, Halifax Mortgages, said: “House prices were largely unchanged in May, edging down very slightly (-£130) compared to April, with the average UK property now costing £286,532. More notably the annual rate of growth fell to -1.0%, marking the first time since 2012 that house prices have fallen year-on-year. Given the effectively flat month, the annual decline largely reflects a comparison with strong house prices this time last year, as the market continued to be buoyant heading into the summer.
“Property prices have now fallen by about £3,000 over the last 12 months and are down around £7,500 from the peak in August. But prices are still £5,000 up since the end of last year, and £25,000 above the level of two years ago.
“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.”
Nathan Emerson, CEO of Propertymark, the UK professional body for estate agents, said: “House prices are holding steady, and we are in a sturdy market.
"Propertymark data has found a 70% increase in properties available for sale compared to April 2022, showing confidence from sellers, and giving buyers more choice and room for negotiation."
