Halifax’s House Price Index for May has revealed that annual house price inflation was at its strongest in almost seven years.
The average UK house price was recorded at £261,743 in May, up 1.3% from April, 2.4% from the previous quarter and up 9.5% year on year reaching a new record high.
Wales has continuously experienced growth with house prices up 11.9% over the last year, the largest growth since 2005. Close behind are the North-West and Yorkshire & Humber whose areas both showed significant annual growth.
Russell Galley, Managing Director at Halifax said “Heading into the traditionally busy summer period, market activity continues to be boosted by the government’s stamp duty holiday, with prospective buyers racing to complete purchases in time to benefit from the maximum tax break ahead of June’s deadline, after which there will be a phased return to full rates. For some homebuyers, lockdown restrictions have also resulted in an unexpected build-up of savings, which can now be deployed to fund bigger deposits for bigger properties, potentially pushing property prices even higher.
“Whilst these effects will be temporary, the current strength in house prices also points to a deeper and long-lasting change as buyer preferences shift in anticipation of new, post-pandemic lifestyles – as greater demand for larger properties with more space might warrant an increased willingness to spend a higher proportion of income on housing. These trends, coupled with growing confidence in a more rapid recovery in economic activity if restrictions continue to be eased, are likely to support house prices for some time to come, particularly given the continued shortage of properties for sale.”