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Economy
May 10, 2026
Analyzed by GPT OSS 120B

UK House Price Growth Slows Amid Middle East Conflict, Halifax Halves Forecast

AI Summary
Halifax cut its annual house‑price growth estimate to 0.4% after a second straight monthly decline, citing the Middle East conflict’s impact on energy prices and inflation expectations. Meanwhile, Nationwide reported a 3% year‑on‑year rise, highlighting divergent readings of the UK market.

The Lead: Halifax Cuts Annual Growth Forecast in Half

Halifax, the mortgage arm of Lloyds Banking Group, announced on 10 May 2026 that its estimate for annual house‑price growth fell to 0.4% from 0.8%, after the index recorded a second straight monthly decline in April.

Halifax Reports Second Consecutive Monthly Decline as Geopolitical Tensions Bite

The average UK home price slipped 0.1% in April to £299,313, following a 0.5% drop in March. Halifax attributes the slowdown to the fallout from the conflict in the Middle East, which has pushed energy prices higher and revived inflation concerns.

  • April price change: –0.1% (to £299,313)
  • March price change: –0.5%
  • Annual growth forecast: 0.4% (down from 0.8%)

Numbers Reveal Diverging Trends Between Halifax and Nationwide

While Halifax sees a contraction, rival building society Nationwide reported a 3% year‑on‑year rise in April, with the typical property now valued at £278,880. Nationwide’s monthly data show a 0.4% increase in April after a 0.9% rise in March, marking four straight months of growth.

  • Nationwide YoY April rise: 3%
  • Nationwide monthly April rise: 0.4%
  • Nationwide March rise: 0.9%
  • Halifax vs Nationwide: Halifax –0.1% (April) vs Nationwide +0.4% (April)

Broader Implications for Buyers, Sellers, and Mortgage Rates

Higher energy costs have lifted inflation expectations, prompting lenders to raise rates. The average two‑year fixed mortgage climbed to 5.77% from 4.83% in early March, while the five‑year fixed rose to 5.69% from 4.95%. Amanda Bryden, head of mortgages at Halifax, warned that households are becoming more cautious, and sellers are still pricing based on pre‑conflict expectations, creating a widening buyer‑seller gap.

  • Two‑year fixed mortgage: 5.77% (up from 4.83%)
  • Five‑year fixed mortgage: 5.69% (up from 4.95%)
  • Key quote: “The problem facing the market … sellers are still pricing based on expectation rather than current market reality,” – Chris Hodgkinson, MD of House Buyer Bureau

What the Next Quarter May Hold for the UK Property Market

Analysts expect the market to remain volatile as long as geopolitical uncertainty persists. If energy prices stabilize, mortgage rates could plateau, allowing price corrections to settle. However, continued escalation could deepen the slowdown, prompting further price adjustments and potentially reviving demand for lower‑priced assets.

  • Short‑term outlook hinges on Middle East conflict trajectory
  • Potential for modest price recovery if rates stabilize
  • Risk of deeper decline if inflation and borrowing costs stay high