UK house prices fell for the first time this year in May, as higher mortgage rates and uncertainty from the Iran conflict weighed on buyer demand. Nationwide said average prices dropped 0.6% month-on-month to £278,024, while annual growth slowed to 1.7% from 3% in April. The move suggests the housing market is becoming more sensitive to global shocks, particularly as higher oil prices raise inflation risks and push market interest rates up. That makes mortgage deals more expensive and could make the Bank of England more cautious about cutting rates quickly. For now, the weakness may prove temporary if energy prices settle, but affordability remains stretched. The main market reaction was in energy and rates: Brent crude rose about 3.5% to around $94 a barrel, while higher mortgage pricing kept pressure on UK housing sentiment.