TOP NEWS: UK house prices hit new record as inflation casts shadow

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UK house prices surged to fresh record highs in May, but growth was showing signs of slowing amid inflationary pressures, according to mortgage lender Halifax on Wednesday.

On an annual basis, the Halifax UK house price index rose by 10.5% in May, slowing slightly from 10.8% in April.

The house price index increased 1.0% in May month-on-month, easing from a 1.2% rise in April.

The average price for a home in the UK stood at a fresh record high of £289,099 in May, up from £261,709 at the same time last year.

Russell Galley, managing director at Halifax, said: ‘For house hunters, the extent of the impact of property price inflation continues to be linked to the type of home they are looking to buy. Compared to May last year, you'd need around £10,000 more to buy a flat, but an additional £50,000 for a detached home. This clearly creates a knock-on effect for those looking to make their first home move, as the rungs on the housing ladder have become increasingly wider.

‘However, the housing market has begun to show signs of cooling. Mortgage activity has started to come down and, coupled with the inflationary pressures currently exerted on household budgets, it's likely activity will start to slow. So, there is perhaps one green shoot for prospective purchasers; with overall buying demand down compared to last year, we may be past the peak sellers' market.’

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