The average UK house price fell by around £1,150 or 0.4% month-on-month in May, according to an index.
Despite the monthly price drop, property values have increased by more than £7,000 over the past year, Halifax said.
May’s month-on-month price fall follows a 0.3% increase in April.
The annual rate of house price growth also slowed to 2.5% in May, from 3.2% in April.
Halifax’s latest report contrasts with the findings from Nationwide Building Society’s latest house price index, released on Monday this week. Nationwide said that property values had increased by 0.5% month-on-month in May, following a 0.6% fall in April.
Amanda Bryden, head of mortgages at 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.
“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 still uncertain economic backdrop, the housing market has shown resilience – a story we expect to continue in the months ahead.”
Stamp duty discounts became less generous from April for some home buyers. Stamp duty applies in England and Northern Ireland.
In signs of the stamp duty cliff edge, figures recently published by HM Revenue and Customs (HMRC) showed an estimated 64,680 house sales took place in April – 64% lower than 177,440 transactions reported in March.
Tom Bill, head of UK residential research at Knight Frank said: “Demand was front-loaded this year thanks to April’s stamp duty deadline, which means house prices are coming under downwards pressure as buyers still in the market have a lot to choose from.
“While activity will eventually pick up, concerns around inflation and the Government’s tight financial headroom mean mortgage rates don’t feel poised to drop meaningfully. We expect UK growth of 3.5% in 2025, which suggests the direction of travel for prices will be largely sideways.”
Jeremy Leaf, a north London estate agent, said: “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.”
Nathan Emerson, chief executive of property professionals’ body Propertymark, said: “This slight dip in house prices will likely have been influenced as a direct consequence to the current state of the global economy.”
Iain McKenzie, chief executive of the Guild of Property Professionals, said: “The key fundamentals supporting home buyers remain strong – low unemployment, rising real earnings, and the continued anticipation of easing borrowing costs in the medium-term.”
Matt Thompson, head of sales at London-based estate agent Chestertons, said: “Some house hunters paused their search amid the Easter holidays in April but were quick to resume their activity in May.
“Buyer motivation was then boosted further by the Bank of England’s decision to cut interest rates to 4.25%. As the majority of sellers have been eager to move themselves, there has been a steady flow of agreed sales in May and, as buyer demand remains strong, we expect a busier-than-usual summer market.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “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.”
Andrew Montlake, CEO of Coreco mortgage brokers, said: “House prices may have dipped slightly but overall, the market remains fluid.”
Jonathan Handford, managing director at estate agent group Fine & Country, said: “Regional variations continue to shape the market landscape. While some areas have seen sharper price adjustments, others are stabilising or experiencing more gradual declines – creating promising opportunities for buyers ready to take action.”
Jason Tebb, president of OnTheMarket, said: “As property prices remain relatively steady, affordability continues to impact what buyers are able or willing to pay.”
House price growth across Northern Ireland, Wales and Scotland has been outpacing regions in England, Halifax said.
In London, house prices have increased by just 1.2% year-on-year, the report said.
But Halifax said that London remains the most expensive part of the UK housing market, with the average home priced at £542,017.
Here are average house prices and the percentage annual increase, according to Halifax. The regional annual change figures are based on the most recent three months of approved mortgage transaction data:
East Midlands, £244,754, 2.8%
Eastern England, £334,720, 1.6%
London, £542,017, 1.2%
North East, £175,174, 2.0%
North West, £240,823, 3.7%
Northern Ireland, £209,388, 8.6%
Scotland, £214,864, 4.8%
South East, £391,253, 1.8%
South West, £304,519, 1.1%
Wales, £230,405, 4.8%
West Midlands, £260,118, 3.0%
Yorkshire and the Humber, £213,983, 3.7%
