Halifax: UK house prices drop by 0.2% in May

House prices in the UK dropped again in May with prices 0.2% lower than in April, according to the latest Halifax House Price Index.

Halifax: UK house prices drop by 0.2% in May

The lender’s index has revealed that in the latest quarter (March to May) house prices were 0.5% lower than in the preceding three months (December to February).

However, house prices in May were 2.6% higher than in the same month a year earlier.

HMRC Monthly property transactions data shows a large fall in UK home sales in April. UK seasonally adjusted residential transactions in April 2020 were 46,440 – down by 46.1% from March due to the coronavirus lockdown measures.

Year-on-year, transactions in April were approximately 53.4% lower than April 2019 (56.7% lower on a non-seasonally adjusted basis).

Mortgage approvals also fell in April. Bank of England figures show that the number of mortgages approved to finance house purchases were 15,848 in April 2020 – this represents a 72% month on month fall from March, following a 24% fall in March. Year on year fall is 76%.

Russell Galley, managing director, Halifax, said: “With the full impact of lockdown measures taking a firm grip on the UK property market by May, the average house price fell by 0.2% to £237,808. This is the third successive monthly fall, though more modest than in April, and reflects a continued loss of momentum following what was a strong start to the year.

“Though it should still be noted that with a limited number of transactions available, calculating average house prices remains challenging and increased volatility is to be expected.

“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. However, the extent of downward pressure on market confidence and prices over the coming months will depend on how quickly the economy is able to recover from the effects of the pandemic and the available government policy support for jobs and households.”

  • Read all of our articles relating to COVID-19 here.
Share icon
Share this article: