UK house price growth slowed sharply in May, with annual growth falling to 1.7% from 3.0% in April, according to Nationwide.

Nationwide's house price index (HPI) published today showed that house prices also fell by 0.6% month-on-month, which is the first monthly decline of 2026 leaving the average UK property valued at £278,024, down from £278,880 in April.

Nationwide chief economist, Robert Gardner, said the slowdown reflected growing economic uncertainty linked to developments in the Middle East, rising energy prices and higher market interest rates.

Despite the softer figures, Gardner pointed to several positive factors, including stronger-than-expected economic growth at the start of the year, easing inflation and improving housing affordability.

“This provides some confidence that, if the latest shock passes relatively quickly, and energy prices normalise in the quarters ahead, any near-term softening in the housing market will also prove short lived,” said Gardner.

Commenting on the Nationwide findings, Nicky Stevenson, managing director at Fine & Country, described May's decline as "more like a pause than a reversal", arguing that buyers remain active despite becoming more selective and price-conscious.

“We’re seeing that buyer confidence has taken a knock and enquiries have softened, which helps explain why pricing has eased back this month. However, affordability has been improving over recent years as incomes have outpaced house price growth,” said Stevenson. “In practical terms, May has been a more value-led market. Buyers are active, but they are selective and more rate-sensitive, and that’s pushing the market to be more realistic. If the current shock proves short-lived and cost-of-living pressures ease a little, this cooldown should also be short-lived.”

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