UK house prices record first annual contraction in a decade

UK house prices recorded the first annual contraction in more than a decade in May, according to mortgage provider Halifax, as potential buyers were hit by higher mortgage rates.

Property prices were down 1 per cent last month compared to May 2022, the first annual decline since December 2012.

Kim Kinnaird, director of Halifax mortgages, said the drop in prices reflected “the effect of higher interest rates”. He added that further growth is expected in the market, which will “inevitably impact confidence in the housing market”.

Halifax reported that average property prices have now fallen by almost £3,000 over the past 12 months and are down almost £7,500 from their peak in August. However, prices were still up £5,000 from the end of last year, and £25,000 above levels two years ago, reflecting a pandemic boom.

Earlier this month, mortgage provider Nationwide reported UK house prices fell by an annualized rate of 3.4 per cent in May, the biggest drop since 2009.

UK house prices recorded the first annual contraction in more than a decade in May, according to mortgage provider Halifax, as potential buyers were hit by higher mortgage rates.

Property prices were down 1 per cent last month compared to May 2022, the first annual decline since December 2012.

Kim Kinnaird, director of Halifax mortgages, said the drop in prices reflected “the effect of higher interest rates”. He added that further growth is expected in the market, which will “inevitably impact confidence in the housing market”.

Halifax reported that average property prices have now fallen by almost £3,000 over the past 12 months and are down almost £7,500 from their peak in August. However, prices were still up £5,000 from the end of last year, and £25,000 above levels two years ago, reflecting a pandemic boom.

Earlier this month, mortgage provider Nationwide reported UK house prices fell by an annualized rate of 3.4 per cent in May, the biggest drop since 2009.