UK house prices fall for third month in a row, says Halifax

Across the UK there was a 0.2% decline in prices

UK house prices have fallen for the third month in a row as the coronavirus pandemic continues to hamper the market.

There was a 0.2% month-on-month drop in house prices to £237,808 in May, according to the latest Halifax house price index.

This was lower than the 0.6% fall recorded in April and the 0.3% in March.

On a quarterly basis, house prices fell 0.5%, compared to 0.7% during the previous three months.

Russell Galley, managing director, Halifax, says: “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.

“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.”

When the lockdown was introduced in March, estate agents, buyers and surveyors were banned from visiting properties. Mortgage lenders also pulled many deals from sale, especially for first-time buyers.

However, the Government has now eased these rules, allowing the housing market to start up again. People can now view properties, visit estate or letting agents and move home.

What does this mean for the housing market?

Galley says the easing of lockdown restrictions should bring a much needed boost to property transactions.

He says: “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.

What do other house price indices say?

The Halifax figures paint a more positive picture than those released by Nationwide earlier this week.

Nationwide says monthly house price growth fell by 1.7% in May, a drop of more than £4,000. This makes it the largest monthly fall since February 2009.

In March, the Government introduced three-month mortgage payment holidays to help support homeowners.

These have now been extended until 31 October for homeowners either coming to the end of a payment holiday or who are yet to request one.

Economists believe the impact of the lockdown on incomes will continue to weigh on the market for the rest of the year, with some predicting house price falls of up to 13%.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Unlike the rather gloomy Nationwide figures from  few days ago, Halifax demonstrates a more hopeful picture for the market, even though prices have fallen for three successive months while emerging from the eye of the Covid storm.

“On the ground, activity has certainly picked up from its very low base with many of the pre-lockdown sales put on hold resuming, albeit cautiously as buyers and sellers come to terms with the new normal.”