Following a 2.4% drop during the previous month, house prices in the UK rose slightly to £160,941 in May. This figure is marginally down on the previous year but constitutes the smallest yearly decline in house prices since October 2010.
The Halifax also released quarterly data, with house prices in the period between March and May recording an 0.8% increase on the preceding three months, the second successive quarterly rise.
Martin Ellis, housing economist at Halifax, said: “House prices in the three months to May were 0.8% higher than in the previous quarter, marking the second successive increase in this measure of the underlying trend. The more volatile monthly figures showed a 0.5% rise in May following April’s 2.3% decline.
“Whilst there has been a modest improvement in the trend for house prices recently, the current average UK price is very similar to the levels both a year ago and at the beginning of this year.
“We expect this situation to continue with prices likely to still be around today’s levels at the end of 2012 as the ongoing tough economic environment constrains housing demand.
“Recent monthly house sales figures have clearly been affected by the ending of the stamp duty holiday for first-time buyers in late March. Overall, the trend for sales – like that for prices – appears to be one of broad stability.”
Peter Rollings, CEO at estate agency Marsh & Parsons, added: “After the trauma caused by the end of the stamp duty holiday for first-time buyers, national house prices seem to be steadying.
“An April lull was inevitable after many buyers brought forward purchases into March, but the last few weeks have seen an improvement on a national level, in spite of a fairly dismal mortgage market and a misfiring economy.
“Until the mortgage market gets back on track, and first-time buyer numbers can return to a semblance of their pre-crunch level, short-term gains in national house prices will continue to be driven by the more buoyant, equity-rich parts of London.”