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GB: Halifax House Price Index
| Actual | Previous | |
| Month over Month | -0.1% | -0.1% |
| Year over Year | 0.5% | 0.4% |
Highlights
The UK housing market remains in a holding pattern, balancing resilience against a backdrop of economic and geopolitical uncertainty. House prices declined marginally by 0.1 percent in May, mirroring April's movement, leaving the average property value at £298,806. Despite this modest monthly weakness, annual growth edged higher to 0.5 percent, indicating that the market continues to avoid a significant correction.
The latest figures suggest that elevated borrowing costs remain the primary constraint on demand. Although mortgage rates have eased slightly, persistent inflation concerns and uncertainty arising from developments in the Middle East have prevented a meaningful improvement in affordability. This has particularly affected first-time buyers, where annual house price growth stands at a subdued 0.3 percent. Nevertheless, stable transaction volumes and increased lender flexibility demonstrate that underlying housing demand remains intact.
Regional disparities continue to define market performance. Northern Ireland remains the standout performer, with annual price growth of 7.8 percent, reflecting constrained housing supply and comparatively affordable property values. Scotland and northern English regions also recorded robust growth, highlighting a shift in demand towards more affordable markets. Conversely, southern England remains under pressure, with house prices declining by 2.1 percent in the South East and 1.5 percent in London.
Looking ahead, the housing market is expected to remain broadly stable. Sustained price growth will likely depend on improving inflation prospects, lower mortgage costs, and stronger consumer confidence, while regional affordability advantages continue to support northern markets.
Definition
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.
Description
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.