11:49 AM, 7th June 2021, About A year ago
The Halifax House Price Index report for May shows continued strong inflation, with the annual index up 9.5% this month on last year.
The average UK property price now stands at £261,743 with Wales continuing to be the region with the strongest price growth. The monthly price increase was +1.3% and quarterly +2.4%.
Russell Galley, Managing Director, Halifax, said: “House prices reached another record high in May, with the average property adding more than £3,000 (+1.3%) to its value in the last month alone. A year on from the first easing of national lockdown restrictions, and the gradual reopening of the housing market, annual growth surged to 9.5%, meaning the average UK home has increased in value by more than £22,000 over the past 12 months.
“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.”
“All UK regions bar the North East saw an acceleration in year–on–year house price inflation last month. The strongest growth was once again recorded in Wales(up 11.9% over the past year), closely followed by the North West and Yorkshire & Humber, both of which posted double-digit annual growth. For Wales and the North West, these are the biggest percentage gains since April 2005, and for Yorkshire & Humber since June 2006.
“The South of England, traditionally the driving force of national house price performance, is for once lagging somewhat behind the rest of the country. This is especially the case in Greater London, where average prices are still 3.1% higher than a year ago but growing more slowly than the rest of the country. This likely reflects a weakness in city prices given the shift in preference for properties with more space, whilst recent surcharges on stamp duty for non–UK residents and Brexit concerns will also have weighed on the capital’s market.
“However, it should not be forgotten that London property prices were already extremely expensive, having experienced a boom following the global financial crisis, a phenomenon not felt by many other UK regions and nations to anywhere near the same extent.”
HMRC monthly property transactions data for UK home sales decreased in April 2021. UK seasonally adjusted residential transactions in April 2021were 117,860–down by 35.7% from March (down35.8% on a non–seasonally adjusted basis). The latest quarterly transactions (February–April2021) were approximately 23.7% higher than the preceding three months (November 2020–January2021). Year-on-year, transactions were 179.6% higher than April 2020 (197.8% higher on a non–seasonally adjusted basis). (Source: HMRC, seasonally–adjusted figures)