The Office for National Statistics (ONS) house price index for May revealed in monetary terms, the average house price in May was £6,000 higher than last year but £7,000 below the peak of September 2022. 

Average house prices were up by 1.9% on an annual basis, down on the 3.2% annual growth recorded in April. 

Chris Hodgkinson, managing director of House Buyer Bureau, said it had been widely predicted that the housing market would see a standstill. 

He said: “House prices aren’t crashing by any means, but a drop in market activity has also caused them to stall.  

“For those who are looking to sell, a good price is still very achievable. It’s finding a buyer who is in a proceedable position that is the biggest challenge at present.” 

A much-needed price correction 

Malcolm Webb, technical director at Legal and General Surveying Services, said UK house prices had “enjoyed decades of growth” and reached record highs, so any drop should be seen as a “levelling out” in prices.   

Meanwhile Stephen Perkins, managing director at Yellow Brick Mortgages, said: “The UK residential property market will see a much-needed price correction during the second half of the year. This data is just the start.  

“With lots of properties coming to market and fewer buyers able to afford them due to mortgage rates and other cost-of-living pressures, it is now very much a buyers’ market, with plenty of properties to choose from, and those most keen to sell are likely to reduce their asking price to secure a buyer.”  

Regional and country differences 

Scotland recorded the highest annual rise in average house prices with a 3.2% increase to £192,518. On a monthly basis, this was 3% higher than the month before. 

In England, average house prices rose by 1.7% over the year to £303,557 and compared to April this was 0.4% down. Wales recorded a 1.8% uptick in average house prices to £213,374 and a 0.6% increase on the month before. 

In Northern Ireland, where house price changes are recorded on a quarterly basis, there was a 5% annual increase in house prices. The average house price in Northern Ireland stood at £172,005 which was 1.8% lower than the previous quarter. 

Within England, house prices in the North East recorded the strongest yearly growth at 4% to £158,779. This was a 1% fall on the month before. The lowest annual growth was seen in the East of England, where average prices saw a 0% change and a 0.8% decline compared to the month before. 

Property and buyer status 

Detached homes recorded a 2.3% annual increase in average prices to £449,975, while flats and maisonettes reported an equivalent rise to £231,404. 

The average price of semi-detached properties rose by 1.4% to £274,943 and terraced homes saw a 1.6% increase in average prices to £233,140. 

The average price a first-time buyer paid for their home rose by 1.9% annually to £238,092, while former owner-occupiers saw an equivalent increase to an average value of £334,499. 

On a monthly basis, the average price paid by first-time buyers rose marginally by 0.2% and the average price paid by former homeowners dipped nominally by 0.2%.