UK house price growth slowed in May, according to Nationwide’s latest House Price Index, with prices falling by 0.6% month-on-month and annual growth easing to 1.7%. Industry insight points to weakening confidence, affordability pressures and heightened geopolitical uncertainty as factors weighing on market activity, although demand for well-priced homes and continued mortgage rate competition are helping to support transactions.
Experts from across the mortgage and property industry have shared their views.
Robert Gardner, Nationwide’s Chief Economist, said:
“UK annual house price growth slowed to 1.7% in May, from 3.0% in April. Prices fell by 0.6% month on month, after taking account of seasonal effects – the first monthly decline so far this year.
Given the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices and market interest rates, some loss of momentum was to be expected. Indeed, consumer confidence has weakened noticeably since the start of the conflict, with GfK’s headline index falling to its lowest level since late 2023 in April, with only a marginal increase in May.
Measures of housing market sentiment have also deteriorated. The Royal Institution of Chartered Surveyors reported a sharp fall in new buyer enquiries in March, taking the index to its weakest reading since 2023 and remained deep in negative territory in April. “
Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, has shared her comments on the latest data from Nationwide saying:
“The latest analysis from Nationwide reveals a rise in house prices of almost £5,000 year-on-year (1.7%), but a dip month-on-month of almost £900 (-0.6%).
“Affordability remains a key issue for would-be buyers. Not only have house prices risen by almost £14,000 over the past two years alone, but higher mortgage rates, inflationary pressures and a lack of affordable housing create a challenging environment. Due to an unsettled outlook, borrowers are more hesitant to make big financial decisions, as shown in weaker new buyer enquiries, revealed by RICS. Buyers who can afford a mortgage, though, will have bargaining power on their side.
“Consumer confidence has already taken a hit from global pressures, as the intent to make ‘major purchases’ has fallen to its lowest level in over a year, according to GfK. It would be incredibly optimistic to expect this to improve over the next few months, with the cost of living projected to rise, and the conflict in the Middle East now three months in.
“Lenders continue to reprice their offers in reaction to volatile swap rates, with two- and five-year swaps trending at 30-day lows. This typically creates a more tolerant lean towards making further rate cuts than rises. Last week, more than a dozen lenders moved to cut fixed rate mortgages, and the big lenders who have yet to catch up could well show their cards in the next few days.
“It will be vital to keep momentum in the mortgage market at a time when fears over the rise in the cost of living continue to weigh overhead. Relaxing loan-to-income rules to allow buyers to secure their dream home, such as with Nationwide’s Helping Hand mortgage, supports first-time buyers who remain the lifeblood of the market.
“Those looking to get a mortgage of £250,000 are looking at repayments of £1,562 per month, based on a typical two-year fixed mortgage of 5.68%, with a term of 25 years. This is a £1,000 difference over the course of 12 months, compared to the average rate of 5.12% back in June 2025.”
James Bentley, Director at Financial Markets Online, commented:
“Declining consumer confidence and higher borrowing costs are starting to embed the drag on property prices.
Even though annual property price inflation remains comfortably in growth territory, prices have started to fall on a monthly basis.
At heart this is due to property market fundamentals. There’s a glut of homes for sale in many parts of the UK after the number of new listings surged in both April and May.
Meanwhile, there are too few serious buyers chasing too many homes for sale. Separate data from the RICS shows that the number of buyer enquiries collapsed in March, the first month of the Iran conflict.
Meanwhile consumer confidence is intensely fragile as Britons grapple with job uncertainty and rising energy and food costs, neither of which increases people’s willingness to commit to a property purchase.
Mortgage interest rates have settled a little from the highs seen in April, but in the current market, many would-be first-time buyers are being put off by the idea of paying more to borrow money for a home that may be worth less in a year’s time than it is now.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says:
“Price is becoming even more of an issue for the housing market if that’s possible, which is highlighted in these figures from the country’s largest building society.
In our offices, buyers are feeling the heat while uncertainty over the length of the Iran war and its impact on the cost of living and interest rates continues, with domestic political issues of increasing concern.
The change is particularly noticeable among those buyers with the highest loan-to-values, fuelling worries about affordability and contributing to an increase in the length of transactions.
Looking forward, income outpacing house price growth and underlying pent-up demand should mean the dip in activity is relatively modest if the conflict and national political issues can be resolved relatively quickly.”
Ian Futcher, financial planner at Quilter said:
“UK house prices are beginning to come under pressure as the various headwinds it is up against weigh on market momentum. House prices fell by 0.6% in May, and annual price growth dropped from 3.0% in April to 1.7% in May, bringing the average property price to £278,024.
The Bank of England has held rates for now, but the outlook remains uncertain. Much will depend on how the situation in the Middle East evolves and what that means for inflation and energy prices. Any sustained pressure here could yet force policymakers to rethink their path.
For now, we can expect the housing market to remain subdued. Higher energy costs are continuing to feed through to household budgets, and affordability will be increasingly stretched, weakening consumer sentiment further. What’s more, while mortgage rates have eased slightly from the peaks seen earlier in the year as lenders work harder to attract what is a limited pool of buyers, they are still elevated, and we can expect them to be for some time yet.
That is likely to keep house price growth in check over the coming months. Buyers are becoming increasingly price sensitive as higher borrowing costs and wider financial pressures bite, which means any upward movement in prices will likely be modest.
Mortgage rates will continue to dictate the pace of the market in the months ahead. Swap rates are heavily influenced by global developments, and without a clear resolution to current tensions, there is a risk they could edge higher again. For those looking to buy or remortgage, rates are no longer rising sharply, but nor is there a clear path downwards. In this environment, reviewing options early and keeping flexibility, ideally with the support of a mortgage adviser, will put borrowers in a stronger position as the market continues to adjust.”
Nathan Emerson, CEO of Propertymark, comments:
“Stable house prices will be welcomed by many buyers and sellers looking for greater certainty in the market after a prolonged period of economic volatility. Buyers who need to move are continuing to act decisively, particularly where mortgage rates have stabilised, and supply levels remain constrained.
“Many households are continuing to carefully assess affordability before making decisions, particularly as mortgage costs remain higher than many borrowers have become accustomed to over recent years. However, steady pricing can help support confidence and encourage more balanced negotiations between buyers and sellers.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says:
“Despite concerns about the conflict in the Middle East, demand continues to hold up for well-priced, high-quality homes, and the closer the asking price is to true market value, the greater the likelihood of securing a successful sale. Buyers are not stretching to make offers they don’t believe will be accepted – they are simply choosing alternative properties.
In certain price brackets, buyers have the luxury of choice, and vendors need to be mindful of this. While the wider economic backdrop may temper the pace of growth, we are seeing a more price-sensitive market where realism and accurate positioning are key.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, says:
“Falling monthly house prices suggest needs-based buyers are not willing to pay over-the-odds for a property but are negotiating hard.
Lenders continue to cut their mortgage rates, and the steadiness from the Bank of England in holding base rate should lead to a period of calm after much volatility.
Borrowers are taking nothing for granted as the continued high cost of living strains affordability. Many are taking the sensible approach of securing mortgage rates in advance of when needed for peace of mind. Others are keen to proceed with already-reserved rates while they have them.”
Jason Tebb, President of OnTheMarket, comments on the Nationwide HPI saying:
“The fallout from the war in the Middle East is making itself felt, with uncertainty and the challenging economic backdrop resulting in a softening in the market and some loss of momentum.
That said, the housing market continues to demonstrate resilience. Average prices dipped on a monthly basis as focused, price-sensitive buyers negotiate hard, while sellers realise that they will struggle to sell over-ambitiously priced homes.
This is the strongest buyers’ market we have seen in many years, with plenty of stock to choose from. Needs-based buyers are transacting, encouraged by lenders continuing to trim their mortgage rates. The Bank of England’s decision to hold interest rates at recent meetings is having a steadying effect, suggesting a calm, considered approach with no need to panic.”
