House prices across the UK dipped marginally in May, according to the latest House Price Index from Halifax, but the broader market continued to show signs of stability.
The average property price stood at £296,648, marking a monthly decrease of 0.4% from £297,798 in April.
This followed a modest increase of 0.3% the previous month.
Annual house price growth also slowed, easing to 2.5% in May from 3.2% in April.
Despite the month-on-month decline, prices have remained largely flat over the course of 2025 so far, indicating a resilient housing market amid wider economic uncertainties.
Northern Ireland once again recorded the fastest pace of annual property price inflation, up by 8.6% over the past year.
The typical home cost £209,388 in the region, though prices remained well below the UK average.
Wales and Scotland also posted strong annual growth of 4.8% in May.
Average prices came in at £230,405 and £214,864 respectively.
Among the English regions, the North West and Yorkshire and the Humber lead the way, both showing annual house price growth of 3.7%.
Average property values in these areas are now £240,823 and £213,983 respectively.
In contrast, London continued to see more subdued growth, with prices rising by just 1.2% year-on-year.
However, the capital remaieds by far the most expensive part of the UK housing market, with the average home now priced at £542,017.
Amanda Bryden, head of mortgages, Halifax, said: “Average UK house prices fell by -0.4% in May – a drop of around £1,150 – following a modest rise in April.
“Over the past 12 months, prices have grown by +2.5%, adding just over £7,000 to the value of a typical home, which now stands at £296,648.
“These small monthly movements point to a housing market that has remained largely stable, with average prices down by just -0.2% since the start of the year.
“The market appears to have absorbed the temporary surge in activity over spring, which was driven by the changes to Stamp Duty. “
She added: “Affordability remains a challenge, with house prices still high relative to incomes. However, lower mortgage rates and steady wage growth have helped support buyer confidence.
“The outlook will depend on the pace of cuts to interest rates, as well as the strength of future income growth and broader inflation trends.
“Despite ongoing pressure on household finances and a stilluncertain economic backdrop, the housing market has shown resilience – a story we expect to continue in the months ahead.”
Reaction:
Nathan Emerson, CEO of Propertymark:
“This slight dip in house prices will likely have been influenced as a direct consequence to the current state of the global economy.
“There will always be a need for people to move house regardless of international trading relations; however, many aspiring or current homeowners will no doubt be discouraged until they feel confident in their long-term affordability.
“It would be very welcome news for consumers if lenders do feel confident enough to offer additional competitive mortgage products across the summer months, but much will depend on the rate of inflation across the coming months.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts:
“The ongoing resilience of the housing market, despite continued economic uncertainty, is evident.
“The flight to quality continues to be a feature, with buyers more selective and price-sensitive but continuing to transact where values align with lifestyle.
“High mortgage rates have cooled the market somewhat but demand remains underpinned by low supply in some areas.
“The key challenge is affordability – mortgage rates, higher stamp duty and for some, the increase in private school fees, is affecting many families who would like to move but are unable to.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“The cheapest fixed-rate mortgages have started rising again with the trajectory of swap rates, which underpin their pricing, suggesting further mortgage rate increases in the short term.
“However, rates are only part of the picture. The easing of criteria and changes to mortgage stress tests by lenders such as Nationwide and NatWest, following changes to Bank of England guidance in March, means tens of thousands of pounds of extra borrowing may now be available to buyers.
“This will boost affordability, enabling more borrowers to get on the housing ladder in coming months.”
Holly Tomlinson, financial planner at Quilter:
“Following the end of the temporary Stamp Duty thresholds in April, the housing market saw a clear shift in momentum.
“Buyers rushed to complete transactions in March to avoid higher tax bills, but activity cooled noticeably in April, as shown by the Bank of England’s latest mortgage approval figures. Despite this drop in demand, house prices have not fallen off a cliff.
“The fact that prices fell only modestly in May indicates that supply remains constrained and sellers have not yet been forced to adjust their expectations. However, with affordability still stretched and borrowing costs relatively high, the risk of a more prolonged slowdown cannot be ignored.
“Mortgage rates are edging down slightly , but for many buyers, this remains a far cry from the ultra-low rates of recent years. For those coming to the end of a fixed deal, the jump in monthly repayments can be significant, adding to the financial strain.
“Looking ahead, market confidence will likely hinge on the timing and pace of interest rate cuts.
“A more meaningful pick-up in buyer demand may not materialise until there is clearer evidence that mortgage costs are on a sustained downward path. For now, the market appears to be pausing for breath after a frenetic start to the year.”
Iain McKenzie, CEO of The Guild of Property Professionals:
“Today’s Halifax HPI, indicating a marginal 0.4% monthly decline in average property prices, is largely in line with expectations and highlights the underlying stability we’re observing in the market.
“Following the anticipated recalibration in April after the March stamp duty rush, it’s encouraging to see how resilient prices have been. A minor dip of this scale was widely predicted, and the fact that it wasn’t more significant is a testament to the market’s firm footing.
“This resilience is underpinned by a confluence of positive factors, such as the recent welcome interest rate cut, providing a tangible boost to borrowers, and robust economic fundamentals.
“The stronger-than-expected 0.7% GDP growth in Q1 certainly paints a more optimistic backdrop.
“While the recent uptick in inflation has tempered expectations for further rapid rate cuts, the key fundamentals supporting homebuyers remain strong – low unemployment, rising real earnings, and the continued anticipation of easing borrowing costs in the medium term.
“The sharp drop in transactions from March to April was an expected consequence of the stamp duty deadline passing, but signs of stabilisation are already evident. Many agents are reporting encouraging levels of activity, and the Bank of England’s mortgage approval figures, though slightly down on March, remain robust and point to a stable bedrock of buyer demand.
“Crucially, the market’s overall stability is fostering buyer confidence. With reports, like Zoopla’s, indicating that a very high percentage of homes are still achieving their asking price, it’s clear that buyer motivation is strong.
“This marginal price adjustment, when viewed alongside these supportive conditions, reinforces our positive outlook for the housing market as we move through 2025.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“The significant number of purchases brought forward to take advantage of the Stamp Duty holiday ending in March is still having a negative impact on activity now.
“Most of the stock made available at that time, if not sold or under offer, is still available so the inevitable result is a softening in prices.
“However, sales are still proceeding where buyers and sellers are most realistic, with confidence supported by a relatively strong employment picture outweighing economic concerns both here and abroad.”
Tomer Aboody, director of specialist lender MT Finance:
“A relatively small shift in pricing last month further shows a stable market but one which needs some fuel to get it moving.
“Higher taxes and costs mean buyers are waiting for further rate cuts before making their move.
“Some cuts in rates and increased flexibility in terms of affordability will help ease the impact of the Stamp Duty increase.”
