Prices were 3.8% lower on an annual basis, giving an average house price of £184,111 in the UK.
The price falls should be measured against the significant gains in recent years, Halifax reminds us. The average UK price rose by more than £88,000 between August 2002 and August 2007.
The Halifax puts the decline in prices down to the difficulties created for potential house purchasers by the rapid rise in house prices in the last few years, a squeeze on spending power and the reduction in credit availability. These factors have curbed housing demand.
However, high employment levels, low interest rates and a shortage of new homes support housing valuations. Employment increased by 117,000 in the three months to March compared with the preceding quarter and stands at a record high 29.54 million.
Commenting, Martin Ellis, chief economist at Halifax, said: "House prices fell by 2.4% in May. Price falls should be measured against the significant gains in recent years. The average UK house price rose by more than £88,000, or 79%, between August 2002 and August 2007.”
