Map reveals regions worst hit by slowing house price growth

A map reveals the regions worst hit by slowing annual house price growth across the UK as a major lender estimates an overall drop.

An index by building society Halifax said annual house price growth had turned negative for the first time since 2012, with an average fall of 1 per cent.

The figures appear to show a divide between the north, where prices are still growing and the south, where they are slowing.

House prices are generally higher in the south, where mortgage holders tend to borrow more to pay for their properties.

South East England experienced the biggest slow down in price growth at -1.6 per cent.

The West Midlands and Yorkshire and Humber were the strongest performing regions on 2.7 per cent and 2.3 per cent respectively

The average house price remained flat month on month, with 0.0 per cent growth in May, sitting at £286,532, Halifax said.

Kim Kinnaird, director, Halifax Mortgages, said: “Given the effectively flat month, the annual decline largely reflects a comparison with strong house prices this time last year, as the market continued to be buoyant heading into the summer.

“Property prices have now fallen by about £3,000 over the last 12 months and are down around £7,500 from the peak in August.

“But prices are still £5,000 up since the end of last year, and £25,000 above the level of two years ago.”

Ms Kinnaird added: “As expected, the brief upturn we saw in the housing market in the first quarter of this year has faded, with the impact of higher interest rates gradually feeding through to household budgets, and in particular those with fixed-rate mortgage deals coming to an end.

“With consumer price inflation remaining stubbornly high, markets are pricing in several more rate rises that would take (the Bank of England) base rate above 5 per cent for the first time since the start of 2008. Those expectations have led fixed mortgage rates to start rising again across the market.

“This will inevitably impact confidence in the housing market as both buyers and sellers adjust their expectations, and latest industry figures for both mortgage approvals and completed transactions show demand is cooling.

“Therefore further downward pressure on house prices is still expected.”

Tom Bill, head of UK residential research at estate agent Knight Frank, said: “This is unlikely to be the last national house price index to fall into negative territory this year.

“Mortgage rates will keep edging up as wage growth keeps core inflation stubbornly high and we expect prices to fall by around 5 per cent this year.

“However, this isn’t the global financial crisis part two for house prices and any decline will be kept in check by rising wages, low unemployment, cash sales, record-high levels of housing equity, longer mortgages and savings amassed during the pandemic.

“The UK housing market is coming back down to earth after a strong three years, not falling off a cliff.”

Here are average house prices across UK nations and regions, according to Halifax, with the annual percentage change. The regional annual change figures are based on the most recent three months of approved mortgage transaction data:

– East Midlands, £333,364, minus 1.0%

– Eastern England, £240,040, 0.2%

– London £536,622, minus 1.2%

– North East, £187,334, 1.5%

– North West, £169,394, 1.6%

– Northern Ireland, £223,795, 1.6%

– Scotland, £201,596, 1.3%

– South East, £385,943, minus 1.6%

– South West, £301,079, minus 1.4%

– Wales, £218,365, 1.1%

– West Midlands, £251,137, 2.7%

– Yorkshire and the Humber, £205,035, 2.3%