Driven by the imminent stamp duty holiday deadline, UK house prices have once again seen an enormous spike of 9.5% in the year to May. According to the latest figures from Halifax, the average market value for a UK home increased by more than £22,000, reaching a new all-time high of £261,743.
Along with elevated demand among buyers looking to take advantage of the government’s temporary stamp duty holiday, Halifax also cited growing demand for more spacious properties as a major catalyst for the sector.
“There’s greater demand for larger properties with more space,” said Halifax managing director Russell Galley, who spoke of “new, post-pandemic lifestyles,” triggering a major shift in buyers’ priorities.
“An increased willingness to spend a higher proportion of income on housing” has also resulted in more people than ever before setting their sights on larger homes with more extensive outdoor living spaces.
The figures released by Halifax indicate the fastest annual house price growth in May for almost seven years, with average property values having increased around 1.3% month-on-month.
Halifax said annual house price inflation was at its strongest level in nearly seven years, with UK prices rising by 1.3% month-on-month.
An increase in purchasing power
Elsewhere, real estate experts and economists have highlighted the role affordable borrowing is playing in driving the sector towards a successful summer. Low interest rates and the re-introduction of the 95% LTV mortgage are encouraging on-the-fence buyers to make their moves, while the opportunity to access considerable savings exists.
“This market is moving so fast that if you blink, it increases in value,” commented Fine & Country managing director Nicky Stevenson.
“It is incredible to watch when desire wrests control away from other factors during periods of exceptionally high demand like this, and it could be about to get even busier.”
“Now that almost all foreign holidays appear to be off, there’s nothing stopping the freight train that is unbridled demand from crashing straight through June, July, and August”.
Similarly, Lucy Pendleton of James Pendleton Estate Agents commented on how the unprecedented events of the year to date have created a climate of more “ambitious” property purchase intent.
“The inability of Britons to go on holiday means there’s no distraction now from executing that ambitious move to a larger home,” she said.
However, others have highlighted the growing difficulties faced by the vast majority of first-time buyers, who are finding themselves priced entirely out of the market in key locations across the country. The strongest average property price growth was recorded in Wales, reaching an unprecedented 11.9%. The rapid acceleration was also evident across Yorkshire and the Humber, both of which achieved average increases in excess of 10%.