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House prices fall just 0.2pc in May despite market shutdown, says Halifax

Isabelle Fraser
illo

The fall in house prices slowed last month as England's property market reopened, according to lender Halifax.

Average property values across the UK fell 0.2pc, the bank's index showed, lower than the monthly falls of 0.6pc it recorded in April and 0.3pc in March. Price are still 2.6pc higher than the same month last year, it said.

May's figures were less dramatic than those recorded by Nationwide's rival index, which said house prices were down 1.7pc in May, the largest monthly drop since 2009.

This is the first time the lenders have released their house price indices since the market was allowed to reopen in mid-May, with many buyers thought likely to have demanded a discount in a bid to get sales over the line.

Scotland's market is due to be restart later in June, which may spur more activity in the next few months.

Russell Galley, managing director at Halifax, said: “We expect market activity to increase progressively as restrictions are eased further.

“However, the extent of downward pressure on market confidence and prices over the coming months will depend on how quickly the economy is able to recover.”

Calculating the figures remains difficult because the property market entered deep freeze at the height of the crisis.

Mortgage approvals collapsed by 80pc in April according to the Bank of England, as lockdown measures were brought in.

Property website Rightmove and the Office for National Statistics both paused their house price trackers due to the lack of activity on the market. Rightmove will restart its index this month.

The difference between Halifax and Nationwide's price measures raises questions about how reliable they are.

Hansen Lu, of analysis firm Capital Economics, said that Nationwide's steeper monthly fall could be a sign of sharp swings because so few deals were agreed.

Lucy Pendleton, of estate agency James Pendleton, said: “The Halifax index has always been a little more bullish than the rest but its May data has a reassuring whiff of confidence.

“Halifax’s annual growth rate is inconsistent with a market completely bowled over by panic and fear and we expect this picture to continue. 

“What is transpiring is a slight softening in prices as the market finds its feet again. As long as the UK’s transition out of furlough is managed correctly, then the balance of supply and demand will remain in vendors’ favour.”