- Average house prices rose just 0.5% in the year to May (source: House Price Index – May 2026 | Halifax)
- But they dropped 0.1% in a month to £298,806 – a similar fall to a month earlier
- Lower buyer confidence is taking a toll
Sarah Coles, head of personal finance at AJ Bell, comments:
“The property market is usually flourishing at this time of year, with new growth springing up and brighter days bringing buyers back in droves. This May was decidedly less fruitful for sellers.
“Higher mortgage rates have taken a toll, pushing property prices out of reach for some, and persuading others that now isn’t the time to take the leap. However, an awful lot of this is down to sentiment. Confidence is the engine of the property market, and it’s running on empty right now.
“International instability has driven oil prices higher, and while it has taken some time for this to work its way through into wider price rises, we know it’s on the way. Fears of inflation are compounded with worries about the employment market. Rising unemployment and widespread concerns about the world of work in the age of AI are making some jobs feel less secure.
“The RICS Residential Market Survey shows buyer numbers remain weak, agreed sales are down and there’s only a trickle of new properties coming to the market. It’s impossible to predict when there might be lasting peace in the Middle East and difficult to know when there could be a more positive period for the employment market, so it’s hard to see when the property market might pick up again.
“On the plus side, sales haven’t dried up entirely. There was a positive sign in higher numbers of mortgage approvals in April, which tends to give us an indication of demand in the coming months. However, those buyers will be searching for better bargains and driving a harder bargain, so sellers will need to price realistically to secure sales.
Ways to prepare if you’re looking to buy
“If a more sluggish market has persuaded you to take your time with a purchase, it’s an opportunity to improve your position for when the time is right. For first-time buyers that could mean using this year’s Lifetime ISA allowance to boost your deposit – with the added benefits of the government bonus. If you have time on your side, then it could also be an opportunity to invest using your Lifetime ISA to help build up your pot before taking the plunge.
“For those moving up the ladder, it’s a great chance to show your emergency savings some love. A move is always more expensive than anyone expects, so building a bigger safety net gives you something to fall back on when it turns out your new boiler is on the blink.”
