U.K. property market experiences first annual decline in house prices since 2012

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8th June 2023 – (London) The United Kingdom’s (UK) property market has experienced its first annual decline in property prices since 2012, according to mortgage lender Halifax. In May, the average UK property price fell by 1.0 percent compared to the same period last year. This is a significant drop of approximately £3,000 over the last 12 months, with property prices now around £7,500 lower than the peak reached last August.

Despite a flat month-on-month performance in May, the impact of higher interest rates is gradually impacting household budgets, especially for those with fixed-rate mortgage deals coming to an end. Director of Mortgages at Halifax, Kim Kinnaird, said, “As expected, the brief upturn we saw in the housing market in the first quarter of this year has faded, with the impact of higher interest rates gradually feeding through to household budgets.”

In May, the Bank of England raised its benchmark interest rate to 4.5 percent, the highest since 2008, to combat high inflation. The UK’s Consumer Price Index (CPI) inflation remained high in April, and further rate hikes are anticipated in the coming months.