House prices in the UK during May were 0.2% lower than they were in April, according to new data published in the latest Halifax House Price Index.

Halifax’s figures also showed that house prices in the latest quarter – between March and May – were 0.5% lower than in the preceding three months between December and February.

Compared to 2019’s data, the average UK house price of £237,808 in May had actually seen an increase of 2.6% from the same month a year earlier.

However, Halifax managing director, Russell Galley, suggested the full impact of lockdown measures had taken a “firm grip” on the UK property market by May.

“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,” he commented. “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.”

Selina Finance co-founder, Andrea Olivari, suggested that the figures would make “uncomfortable reading” for homeowners.

“On first glance, this drop in prices may spark concern about the state of the market, and knock-on effect to personal wealth,” he commented. “However, it’s worth remembering that we’ve seen a significant drop-off in housing transactions and so this index is based on a small sample and may not paint the full picture.”

Halifax did reveal that May’s house price indices were based on significantly lower volumes of mortgage transactions than average, but indicated it still had “confidence” in the future of the market.

Galley added: “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.”

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