span>span>Wednesday 7th June 2023/span>span> - 07:45 (BST)/span>/span>
The latest data from the Halifax House Price Index paints a sombre picture for the UK property market as house prices experienced a 1% year-on-year drop during May. The decline was in line with market expectations and marked the first y-o-y decline since December 2012.
The fleeting optimism witnessed in the housing market during the first quarter of this year has waned, as the repercussions of higher interest rates gradually permeate household budgets. The most substantial decrease in prices were observed in the flat segment (down 1.9%), terraced houses (down 1%) and semi-detached houses (down 0.5%). Detached houses were the only space that managed to buck the trend with a modest increase of 0.4%.
The index also revealed a continuing devaluation trend for existing houses with prices witnessing a decline of 1.9%. In contrast, the cost of new build properties continues to rise, albeit at a significantly slower pace than in previous years, experiencing a growth rate of 2.8%. However, this upward trajectory was the weakest observed in nearly three years.
The current average price for a typical property in the UK now stands at £286,532, a minor decrease from April's figure of £286,662. This marginal dip emphasises the overall stagnation permeating the market.
The latest readings put pressure on GBP that had been riding a wave of speculation regarding further near-term interest rate moves by the Bank of England. Both GBP/EUR and GBP/USD had pushed back to yearly highs in recent weeks, however subdued UK economic data has now seen some retracement.
