Nationwide data shows a sharper-than-expected monthly decline as geopolitical uncertainty weighs on housing sentiment.
UK house prices dropped 0.6% month-on-month in May, missing forecasts of a 0.2% decline, as the average dwelling price fell to £278,024. The decline follows a 0.4% rise in April and reflects growing uncertainty linked to Middle East conflict, which has pressured consumer confidence and energy costs.
Annual price growth slowed to 1.7%, below the 2.2% consensus and down from 3.0% in the prior period. While still above year-ago levels, the moderation suggests a loss of momentum in the housing market amid rising market interest rates and weaker sentiment.
Swap rates, which influence fixed-rate mortgage pricing, remain below 2023 peaks but have climbed in recent months. Affordability impacts have been modest so far, though further shocks could prolong softness in the sector.