The Halifax said that the average UK home now cost £286,532. It said that prices had edged down slightly compared with a month ago. A buoyant market a year ago was a major reason for the year-on-year fall, it said.
Rival lender the Nationwide has recorded a deeper fall in house prices, according to its data. It said a week ago that property values were down in the year to May by 3.4%, the biggest decline for 14 years. Although that may be welcomed by first-time buyers, higher than expected mortgage rates are squeezing their purchasing power.That compares with 5.34% before the latest inflation data.
It comes as new data from UK Finance shows people increasingly taking out mortgages over longer terms, with a record one in five first-time buyers opting for mortgages of more than 35 years. UK Finance suggested customers might be choosing this option "in order to lower monthly payments and, thereby, improve their affordability calculations".