Middle East insecurity and high inflation expectations continue to keep borrowing costs high
UK house prices remained “broadly stable” in May, according to the latest Halifax House Price Index, flattened by higher borrowing costs and global uncertainty.
Average prices dipped by 0.1% for the second month running, taking the typical home to £298,806, while annual growth edged up slightly to 0.5%.
Amanda Bryden, head of mortgages at Halifax, said: “Property price trends continue to reflect the uncertainty linked to developments in the Middle East.
”Despite recent cuts to mortgage rates, higher inflation expectations have kept borrowing costs above the level seen at the start of the year, continuing to stretch affordability for many buyers and temper demand.”
She added that “overall activity has held up well” despite this broader market uncertainty, which she said suggested that “buyers and sellers are still moving.”
First‑time buyer growth was more muted at 0.3%, though lenders are expanding low‑deposit and flexible affordability products.
Regional performance continued to “vary significantly.” Northern Ireland again led the UK with 7.8% annual growth – the highest rate of growth in the last six months. Scotland posted a 3.8% increase and Wales 0.1%.
The North East and North West of England recorded annual rises of 3.1% and 3.0% respectively. Southern regions remained in decline, with the South East down 2.1% and London falling 1.5% year‑on‑year.
Halifax expects prices to remain “broadly stable” in the coming months, with any sustained recovery dependent on easing inflation and lower mortgage costs.
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