British house prices dipped by 0.1% in May compared to April, indicating market stabilization following last year’s slowdown and a subsequent recovery fueled by hopes of decreasing

borrowing costs, according to data from mortgage lender Halifax.

Most analysts polled by Reuters had anticipated a monthly increase of 0.2%.

Over the 12 months to May, house prices rose by 1.5%, exceeding the median forecast of a 1.2% annual increase in the Reuters poll, Halifax announced on Friday.

"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," said Amanda Bryden, head of mortgages at Halifax.

The stable trend in property prices over the past three months is likely to boost confidence among both buyers and sellers, Bryden noted.

Last week, rival lender Nationwide reported an increase in its measure of house prices in May, following declines in the previous two months.

Britain's housing market has regained momentum after mortgage rates fell from last year's 15-year highs, driven by expectations that the Bank of England will begin to cut its benchmark interest rates.

Investors currently see a roughly 70% chance that the BoE will lower the Bank Rate at its September meeting.