House prices down just 1.1% from peak

House prices have fallen just 1.1% from their pre-lockdown peak, according to the latest house price data from the Halifax.

The mortgage lender today reported a third month-on-month fall in prices in May, with prices down by 0.2% in the month to an average price of just under £238,000.

This is a fall of 1.1% in total from the recent pre-lockdown peak in house prices in February, and takes prices back to the level last seen in December 2019. Year-on-year, the firm said, prices are still up, with May’s number 2.6% above the level of May 2019.

The price fall paints a more optimistic picture than that seen by rival lender Nationwide earlier this week, which reported a decline in prices of 1.7% last month, the steepest fall for a decade.

Russell Galley, managing director of the Halifax, said the easing of lockdown restrictions on the housing market was likely to lead to a “short-term boost” in prices and that he still had “confidence in the underlying health of the housing market over the long-term”.

He said: “The extent of downward pressure on market confidence and prices over the coming months will depend on how quickly the economy is able to recover from the effects of the pandemic and the available government policy support for jobs and households.”

The falls come amid varying predictions of the impact of the coronavirus crisis on house prices. While estate agents have generally predicted modest single digit falls, the Centre for Economics and Business Research has said it expects house prices to fall by 13%, and Bartlett Real Estate Institute chair Yolande Barnes has predicted falls of anything up to 30%.

The Bank of England has said it expects GDP to fall by 14% this year, the biggest decline for 200 years.