House prices slumped for a third month in May as coronavirus lockdown put transactions on hold, according to lender Halifax.
Average house prices across the UK fell 0.2pc, according to its index, less than the monthly falls of 0.6pc it recorded in April and 0.3pc in March.
May’s figures were less dramatic than those recorded by Nationwide, another lender. It said house prices fell 1.7pc in May, the largest monthly drop since 2009.
Average values were still 2.6pc higher than the same month last year, according to Halifax.
This is the first time the lenders have released their house price indices since restrictions were lifted on the property market, when the Government urged buyers and sellers to pause transactions. These measures were lifted in England in the middle of May, and Scotland’s market is due to be restart later in June, which may spur more activity in the next few months.
Russell Galley, managing director at Halifax, said: “We expect market activity to increase progressively as restrictions are eased further.
“However, 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.”
Calculating the figures remains difficult amid a dearth of transactions with some volatility expected, Halifax said. It and Nationwide are the only two major house price indices continuing to publish amid a collapse in transactions. They both measure house prices based on mortgage approvals, which collapsed by 80pc in April, according to the Bank of England, as lockdown measures were brought in.
Rightmove, the property website, and the Office for National Statistics both paused their indices due to the lack of activity on the market. Rightmove will restart its index this month.
Lucy Pendleton, of estate agency James Pendleton, said: “The Halifax index has always been a little more bullish than the rest but its May data has a reassuring whiff of confidence.
“Halifax’s annual growth rate is inconsistent with a market completely bowled over by panic and fear and we expect this picture to continue.
“What is transpiring is a slight softening in prices as the market finds its feet again. As long as the UK’s transition out of furlough is managed correctly, then the balance of supply and demand will remain in vendors’ favour.”