According to mortgage lender Halifax, British home prices fell on an annual basis in May for the first time in 11 years as the impact of higher interest rates on the property market became more apparent. According to expectations in a Reuters poll, the average house price decreased 1.0% from May 2012 to May of this year, marking the first year-over-year reduction since December 2012. Prices didn't change from April, when they dropped by 0.4%, on a monthly basis. Kim Kinnaird, Halifax's director of mortgages, claimed that lower demand and increased interest rates will likely put more pressure on home prices. Early in 2023, the property market in Britain made some progress toward the decline that had occurred late in the previous year as a result of the former prime minister Liz Truss's announcement of unfunded tax cuts, which set off chaos in the financial markets. The brief upturn in the housing market in the first quarter has faded, with the impact of higher interest rates gradually feeding through to household budgets, and in particular those with fixed rate mortgage deals, coming to an end, Kinnaird said. According to other data from UK Finance, loans to first-time buyers fell to their lowest level since the spring of 2020, when the property market was essentially shut down due to the COVID-19 pandemic. When consumer price inflation came in at 8.7% in April, above the consensus of 8.2%, bond yields spiked, and some mortgage lenders last month cut or repriced their loan offers. Halifax, a subsidiary of Lloyds Banking Group (LLOY.L), announced that the interest rates on its fixed home loans would increase. Higher rates, according to Capital Economics analysts, might lead to a new downturn in the British housing market. Another lender, Nationwide, announced last week that April's home prices fell by 0.5% month over month and 3.4% annually, the worst reduction since 2009. See also: Housing prices to rise near Noida International airportNew housing supply surges by 51% in 2022 across seven cities