Up or down? Where next for house prices

Homeowners may be wondering which way to turn after two of Britain’s biggest lenders produced conflicting views on which way house prices are going.

According to Halifax, there has been practically no change in prices over the past three months, whereas Nationwide Building Society’s house price index shows prices have fallen for the third month in a row, the first time this has happened since 2009.

Prices fell by 0.2% in May, Nationwide said, bringing the average price of a property in the UK to £208,711.

However, Halifax claims that house prices rose by 0.4% between April and May, bringing the average cost of a house or flat in the UK to £220,706.

The two lenders both said that annual house price growth is slowing.

According to Nationwide, annual house price growth has slowed to 2.1%, the weakest growth in almost four years, providing more evidence that the housing market is “losing momentum”. However, it is too early to tell whether recent falls are just a “blip” or the start of a longer-term trend.

“In our view, household spending is likely to slow in the quarters ahead, along with the wider economy, as rising inflation increases the squeeze on household budgets,” said Robert Gardner, Nationwide's chief economist. “This, together with mounting housing affordability pressures, is likely to exert a drag on activity and house price growth in the quarters ahead.”

Halifax, meanwhile, said that house price inflation fell to 3.3% in the year to May, down from 3.8% in the year to April.

Both lenders agreed that a shortage of properties on the market is likely to support prices going forward.

"The fact that the supply of new homes and existing properties available for sale remains low, combined with historically low mortgage rates and a high employment rate, is likely to support house price levels over the coming months," said Martin Ellis, Halifax housing economist.