House prices fell last month as high borrowing costs caused growth in the property market to stall.

Average prices fell by 0.1pc between April and May, the Halifax house price index showed, as interest rates remained at 16-year highs of 5.25pc.

Values had briefly rebounded in April following four months of declines.

It meant the average home was worth £288,688, which was still 1.5pc higher than the same month last year, and the sixth consecutive months of annual growth.

It comes as a rival index from Nationwide showed house prices climbed in May for the first time in three months, rising by 0.4pc after a decline of 0.4pc the previous month.

Amanda Bryden, head of mortgages at Halifax, said: “Market activity remained resilient throughout the spring months, supported by strong nominal wage growth and some evidence of an improvement in confidence about the economic outlook. 

“This has been reflected in a broadly stable picture in terms of property price movements, with the average cost of a property little changed over the last three months.

“A period of relative stability in both house prices and interest rates should give a degree of confidence to both buyers and sellers.”

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