On a non-seasonally adjusted basis, average house prices in the UK increased by 0.9% between April and May 2021, compared with an increase of 0.5% during the same period a year earlier (April and May 2020). House price growth was strongest in the North West where prices increased by 15.2% in the year to May 2021. The lowest annual growth was in London, where prices increased by 5.2% in the year to May 2021.
In May, the average price of a property in the UK was £254,624.
Anna Clare Harper, CEO of property consultancy SPI Capital, says: "Other data sets are faster, but the UK HPI is, in many ways, more important as it represents the whole of the market.
"10 per cent house price growth in the year to May 2021, led by the North West at 15.2 per cent, is unsurprising in the context of the temporary stamp duty reduction, low-interest rates, a flight to safer investments and the natural urge to upsize in the context of lockdown. All of these factors and more have driven demand. At the same time, supply is restricted: new houses aren’t being built fast enough or cheap enough for everyone to be satisfied.
"This rise in house prices is nothing new as a trend: for many years, house prices have risen faster than most people’s wages, because borrowing is cheap and easy. This makes ‘affordable home ownership’ for younger and less well-off people a work of fiction.
"This is not necessarily a bad thing. While ‘Boomers’ still see homeownership as a reflection and determinant of success, younger people don’t all want or need to ‘get on the property ladder’. A higher concern is having access to quality, affordable rental housing.
"The trouble is, many landlords are exiting the market, tired out by the challenges of the role. Overall, it’s a great time for investors who are serious about delivering social value as well as making returns by providing good quality, well-managed housing for their customers at a professional scale. It is also a great time for policymakers to consider what measures will facilitate affordable rental housing for all - not just new build, prime high rise flats, but family homes - both new and existing."
Tomer Aboody, director of property lender MT Finance, says: "Despite a dip in price growth in April, the housing market got back on track in May, continuing on its upwards trajectory. Buyer confidence certainly remains high, not only in terms of the desire to move but also in respect of getting the necessary finance approved, and this is helping push up prices.
"With so many mortgage products out there, buyers have the opportunity to get onto the property ladder or move up it, at record low rates. If you have to stretch yourself to get a bigger mortgage to purchase the property you have set your heart on, low mortgage rates make this a much more palatable proposition.
"Stamp duty holiday or not, prime properties with good outdoor space, including room to work from home and not too far from the station or the office to make commuting possible where necessary, will always be in demand with multiple buyers willing, and able, to pay."
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "Continued strong demand for property, combined with a lack of stock, is pushing up prices further still. Low mortgage rates, combined with bigger deposits built up during lockdown, are giving buyers plenty of purchase power.
"Despite the tapering of the stamp duty holiday, there isn’t much sign of a significant slowdown in the market. Lenders remain keen to lend and interest rates look unlikely to rise anytime soon, resulting in some cheap mortgage deals, particularly for those with large deposits."
