The Halifax House Price Index showed the annual rate of growth slowed from 3.2% in April to 2.5% in May.
On the whole, house prices have been stable this year, Halifax said – just £2,167 lower than they were at the start of 2025, when average values were £298,815.
A small shift in the market
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.
How to get your first-time buyer clients mortgage ready
Sponsored by Halifax Intermediaries
“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.”
Tomer Aboody, director of MT Finance, said: “A relatively small shift in pricing last month further shows a stable market but one [that] 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.”
Holly Tomlinson, financial planner at Quilter, said the fact that house prices were still higher than last year despite a slowdown in activity showed the market was “surprisingly robust”.
Tomlinson added: “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.”
House price growth in NI, Scotland and Wales outpaces England
Halifax’s data showed house price growth in Northern Ireland, Wales and Scotland was stronger than inflation in English regions.
Price growth was strongest in Northern Ireland, with an 8.6% year-on-year increase to £209,388. Despite the increase, property values were still notably lower than the UK average.
Annual growth was recorded at 4.8% in both Wales and Scotland, with average prices 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.
Within England, the North West and Yorkshire and the Humber had the highest increases, both 3.7% up on last year. Average house prices in these regions were £240,823 and £213,983 respectively.
Growth was muted in London at 1.2% year-on-year, but values were still the highest in the UK at £542,017.
The South West had the lowest annual house price inflation at 1.1% to an average of £304,519.
