Why did house prices fall again in May?

There was another drop in the average price of a house in the UK during May, according to the Halifax price index, with the likely cause of this being continued effects of the coronavirus crisis and lockdown restrictions.

The house price index for May shows that average prices dropped by 0.2% during the month, while the stats for the first quarter of 2020 show a fall of 0.5% in the price of a home. The managing director of the Halifax, Russell Galley, highlighted that the drop in the average price to £237,808 reflected the housing market in the UK continuing to feel the effects of coronavirus and the nationwide lockdown.

He then pointed out that it marked the third month in a row where prices had fallen, but that the degree of the drop in comparison to April was less severe than that between March and April, before adding:

“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.”

Galley also explained that the loosening of lockdown restrictions had shown that there were people keen to sell and buy properties and that the Halifax was expecting the UK property market to experience a big bounce in the short term when lockdown ends, followed by a more gradual return to normal levels.

The CeMAP mortgage advisor qualification provides essential knowledge for when advisors try to navigate the property market for their clients in difficult times.



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