UK house prices recorded the first annual contraction in more than a decade in May as potential buyers were hit by higher mortgage rates, according to mortgage provider Halifax.
House prices fell 1% last month from May 2022, the first annual decline since December 2012.
Kim Kinnaird, director of Halifax Mortgages, said the drop in prices reflected “the impact of rising interest rates”. She added that markets were expecting further rate hikes, which “will inevitably have an impact on confidence in the housing market.”
Halifax reported that average house prices had now fallen by around £3,000 over the past 12 months and were down around £7,500 from their peak in August. However, prices were still up £5,000 from the end of last year and £25,000 above the level two years ago, reflecting the pandemic boom.
Earlier this month, mortgage provider Nationwide announced that UK house prices fell by an annual rate of 3.4% in May, the biggest drop since 2009.