Latest Halifax House Price Index says prices remain largely flat

by Aaron Strutt

Jun 19 2023

There has been more talk in the press about house prices falling and market corrections. One recent article in the Evening Standard headline even said a house price crash is "just what our society needs."

According to the latest Halifax House Price Index, UK property prices remained flat in May, although annual growth turned negative. The report said average house price remained flat (0.0%) in May following -0.4% fall in April, while the annual rate of house price growth fell to -1.0% vs +0.1% in April.

A typical UK property now costs £286,532 compared to £286,662 in April, while detached properties continue to post modest house price growth.

Halifax says house prices in the south of England remain under the most significant pressure. However, there is still competition to buy property in many parts of London and the southeast with some estate agents still going to sealed bids on certain prime properties.

One leading estate agent told Trinty Financial that it seems likely that there will be a house price correction, so some properties may well go down in value by 5% or 10%. He said wage inflation is likely to help maintain house prices, and as long as employment holds up, the structure of the mortgage market should protect it from a crash.

The sheer demand for property is also likely to keep house prices high, particularly with the consistently high levels of immigration and insufficient levels of new homes being built.

Trinity Financial director Anthony Emmerson expects prices to remain high for houses simply because of the strong demand levels, although he predicts the prices of flats will come down. He says: "More landlords will sell up us as they struggle to make the figures work with the higher mortgage rates and increased taxation."

Kim Kinnaird, Director of Halifax Mortgages, said: "House prices were essentially unchanged in May, edging down very slightly (-£130) compared to April, with the average UK property now costing £286,532. More notably, the annual growth rate fell to -1.0%, marking the first time since 2012 that house prices have fallen year-on-year. Given the effectively flat month, the annual decline primarily reflects a comparison with high house prices this time last year, as the market continued to be buoyant heading into the summer."

What is happening to stamp duty receipts?

Data from HMRC show that the tax intake for stamp duty receipts for April and May came in at £2.4bn.

This represents a £1.1bn fall on the same period a year earlier.

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The information contained within was correct at the time of publication but is subject to change

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