Halifax records 2.4% drop in house prices for May

The decline in UK house prices continues with Halifax, the country’s largest mortgage lender, recording a 2.4% decrease in May.

This is in line with a 2.5% drop for the month reported by Nationwide earlier this week.

According to Halifax, house prices are now 3.8% below this time last year, with the average price of a home at £184,111.

The fall in annual property inflation is the steepest recorded by the lender since 1993. Should prices continue decline at the rate seen since the beginning of 2008, they will have fallen by 16% by the turn of the year.

Halifax chief economist, Martin Ellis, attributes the state of the market to the rapid rise in house prices over the past few years, pressures on spending power created by higher fuel and food prices and a shortage of credit.

Meanwhile, the Bank of England’s Monetary Policy Committee has opted to leave the base rate unchanged at 5%.

The Bank has to balance inflationary pressures against the dangers of an economic slowdown that is already making itself evident and despite the benefits to the housing market and wider economy of a cut in the base rate, it has been left unchanged for June.

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