UK house prices fall for first time this year as Middle East crisis hits confidence – business live
Nationwide said UK house prices fell 0.6% in May, the first drop this year, as conflict in the Middle East hit confidence.
Intelligence analysis by GPT-5.4 Mini
Nationwide reported a 0.6% monthly fall in UK house prices in May, leaving prices 1.7% higher than a year earlier. The live business blog linked the drop to weaker confidence and higher borrowing costs, while analysts said the market may stay subdued.
A house is like a very expensive toy that many grown-ups want to buy. In May, the price of that toy went down a little in the UK for the first time this year.
That happened while people were feeling nervous because of trouble in the Middle East and because borrowing money is still costly. When families worry or mortgages feel pricey, they often wait before buying.
The story matters because house prices can show how confident people feel about money. If prices and confidence stay soft, the whole economy can slow down a bit, like a car that is pressing the brake instead of the gas.
Analysis
House prices turned lower
Nationwide said UK house prices fell 0.6% in May, the first monthly decline this year and the biggest drop since June 2025. Even so, prices were still 1.7% higher than a year earlier. The Reuters poll had expected a smaller 0.2% fall, so the data came in weaker than forecast.
What is driving the slowdown
The live blog tied the softer market to the impact of the Middle East crisis on confidence, alongside the continuing drag from higher borrowing costs. Tom Bill of Knight Frank said the market was slowing at a point in the year when momentum would normally be building, and warned that higher mortgage costs could erode spending power and pressure prices through 2026. Nationwide’s Robert Gardner said affordability had improved in recent years, but recent rises in market rates were a headwind.
How the market is responding
Propertymark’s Nathan Emerson said stable prices may give buyers and sellers more certainty, while estate agent Amy Reynolds said demand was still holding up for well-priced homes, especially where asking prices matched market reality. Gardner added that if the Middle East crisis eases, the housing market could regain strength. The wider live update also showed cautious markets in Europe and a jump in easyJet shares after takeover interest, underscoring the broader sensitivity to geopolitical risk.
Key points
- Nationwide said UK house prices fell 0.6% in May, the first monthly decline this year.
- Prices were still 1.7% higher than a year earlier despite the monthly drop.
- Analysts linked the slowdown to weaker confidence and higher borrowing costs.
- Commentators said stable pricing may help buyers and sellers, but affordability remains stretched.
- Nationwide said the market could strengthen if the Middle East crisis eases.
