LONDON (dpa-AFX) - UK house prices declined unexpectedly in May after the stamp duty holiday ended in March, data from the mortgage lender Halifax revealed on Friday.
House prices dropped 0.4 percent month-on-month in May, in contrast to the 0.3 percent increase in April. Prices were expected to grow 0.4 percent.
On a yearly basis, house price inflation softened to 2.5 percent in May from 3.2 percent in the previous month.
The small monthly movements point to a housing market that has remained largely stable, with average prices down by just 0.2 percent since the start of the year, Halifax Head of Mortgages Amanda Bryden said.
Bryden observed that the market appears to have absorbed the temporary surge in activity over spring, which was driven by the changes to stamp duty.
Affordability remains a challenge with house prices remain high relative to incomes. Nonetheless, lower mortgage rates together with steady wage growth underpinned buyer confidence.
'The outlook will depend on the pace of cuts to interest rates, as well as the strength of future income growth and broader inflation trends,' Bryden said.
Despite ongoing pressure on household finances and uncertain economic backdrop, Halifax expects the housing market to continue to remain resilient in the coming months.
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