Key facts
- UK house prices fell by 0.1% in May.
- This marks the third consecutive month-on-month decline.
- Prices were 0.5% higher year-on-year.
- Higher borrowing costs and uncertainty linked to the Iran war are impacting buyer demand.
- Average mortgage rates have climbed by almost a full percentage point since the start of the U.S.-Israeli war on Iran.
British house prices unexpectedly fell by 0.1% in May, marking the third consecutive month-on-month decline. This trend is attributed to higher borrowing costs and uncertainty stemming from the Iran war, which is weighing on buyer demand. Year-on-year, prices were up 0.5%. Average mortgage rates have increased by nearly a full percentage point since the conflict began. Despite higher borrowing costs, mortgage approvals in April reached their highest level in 15 months. Financial markets now anticipate potential interest rate hikes by the Bank of England later this year.