"This is the third successive monthly fall, though more modest than in April, and reflects a continued loss of momentum following what was a strong start to the year."
In the latest quarter (March to May) house prices were 0.5% lower than in the preceding three months.
However May's house prices remain 2.6% higher than in the same month a year earlier.
Russell Galley, managing director of Halifax, said: “With the full impact of lockdown measures taking a firm grip on the UK property market by May, the average house price fell by 0.2% to £237,808. This is the third successive monthly fall, though more modest than in April, and reflects a continued loss of momentum following what was a strong start to the year. Though it should still be noted that with a limited number of transactions available, calculating average house prices remains challenging and increased volatility is to be expected.
“The mid-month relaxation of restrictions in England, allowing estate agents and conveyancers to restart operations, brought much-needed positive news with some advance indicators of buyer and seller interest quickly showing signs of improvement. This is likely to provide a short-term boost as buyers and homeowners attempt to kick-start transactions that had previously been put on hold.
“Looking ahead, we expect market activity to increase progressively as restrictions are eased further across the whole of the UK and we continue to have confidence in the underlying health of the housing market over the long-term. However, the extent of downward pressure on market confidence and prices over the coming months will depend on how quickly the economy is able to recover from the effects of the pandemic and the available government policy support for jobs and households.”
Lucy Pendleton, property expert at James Pendleton estate agents, commented: “The Halifax index has always been a little more bullish than the rest but its May data has a reassuring whiff of confidence. We predicted the market would reopen with prices in line with pre-lockdown levels and this isn’t far off.
“The Halifax’s annual growth rate is inconsistent with a market completely bowled over by panic and fear and we expect this picture to continue.
“What is transpiring is a slight softening in prices as the market finds its feet again. As long as the UK’s transition out of furlough is managed correctly, then the balance of supply and demand will remain in vendors’ favour.”
