According to the Halifax, house prices dipped 0.1 percent on the month in May. This followed a weaker revised flat reading in April but with base effects positive, still saw the annual inflation rate climb from 1.1 percent to 1.5 percent, a 3-month high. Average prices remain well above their pre-pandemic levels.

Still, the 3-monthly change - the best guide to underlying developments declined again and at now minus 0.3 percent, posted its lowest reading since the three months ending November last year. Even so, the Halifax noted that market activity had remained resilient during the spring months and expect tight supply, rising consumer confidence and positive real earnings growth to provide prices with some support going forward. Large fluctuations in prices are not anticipated.

Today's data compare with the 0.4 percent monthly increase already shown in the Nationwide survey but both reports paint a similar underlying picture. The UK RPI now stands at minus 4 and the RPI-P at minus 10, indicating a very mild degree of overall economic underperformance.

Prices are expected to rise 0.2 percent on the month following a 0.1 percent increase in April.

The Halifax House Price Index (HPI) is the UK's longest running monthly house price measure with data covering the whole country going back to January 1983. The index is based on the largest monthly sample of mortgage data, typically covering around 15,000 house purchases per month, and covers the whole calendar month. In March 2016 Markit announced that it would be acquiring the Halifax HPI from Lloyds Banking Group. Halifax continues to publish the index on behalf of Markit and both the name and the basic methodology remain unchanged. However, in May 2020, the annual growth measure was changed from the average of the last three months to just the latest month.

Home values affect much in the economy - especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.