Downward price pressures ease, but UK house Prices still down 3.3% year-on-year

The May House Price Index for England and Wales from e.surv shows that downward price pressures are easing across the board, although prices remain 3.3% lower than a year ago. The North East is the first region to move out of negative territory, while the South East still has a lot of catching up to do. The average house price in England and Wales is now £356,014, down 0.2% from April and 3.3% annually.

Richard Sexton, director at e.surv, commented:

“This month, the average sale price of a home in England and Wales in May fell by just over £600 (0.2%) to £356,014, which is about £12,000, or 3.3%, lower than a year ago. Prices are now £23,000 (6.1%) below the peak reached in October 2022, but they still remain some £40,000 (13%) higher than at the start of the pandemic in March 2020.

“The pushing back of previously expected interest rate cuts by the Bank of England and the subsequent upward repricing of mortgage rates by lenders has meant any anticipated help for borrowers has been short-lived. Fewer buyers, of course, have an impact on prices, which we can clearly see being played out at a regional level.

“A real north-south divide has opened up. London, the South East, and East of England are the regions with the weakest price trends and continue to struggle, reflecting the much higher house price levels, affordability challenges, and greater reliance on mortgage finance in these regions – factors that really impact first-time buyers whose prospects of buying have been facing headwinds for years now.

“Much of this may change after the coming election as political parties are already promising action to support the first-time buyer market.”