UK house prices recorded their first annual contraction in more than a decade in May as potential buyers were hit by higher mortgage rates, according to mortgage lender Halifax.
Real estate prices were 1 percent lower last month than in May 2022, the first annual decline since December 2012.
Kim Kinnaird, director of Halifax Mortgages, said the drop in prices reflected “the impact of higher interest rates”. She added that markets expected further interest rate hikes, which will “inevitably erode confidence in the housing market”.
Halifax reported that average property prices had now fallen by about £3,000 over the past 12 months and were about £7,500 lower than their August peak. However, prices were still £5,000 higher since late last year and £25,000 above levels two years ago, due to the pandemic.
Earlier this month, mortgage lender Nationwide reported that UK house prices fell 3.4 percent year on year in May, the biggest drop since 2009.
