UK house prices jump 10% year-on-year

by | Jul 14, 2021

House prices strengthened in May, official figures showed on Tuesday, as they bounced back from April’s dip.
UK average house prices rose 10.0% over the year to May, according to the Office for National Statistics’s latest House Price Index, an improvement on both April’s figure of 9.6% and a 9.9% rise seen in March.

On a monthly basis, prices nudged 0.9% higher to £255,000, returning to growth following April’s 1.9% dip.

Sam Beckett, head of economic statistics at the ONS, said: “House prices grew 10% in the year to May, continuing the trend seen in recent months. Once again it’s property prices in London that are showing the lowest annual growth, with the north west of England showing the strongest.

“After dipping in April, UK average house prices saw a slight monthly increase in the month to May 2021, nearly returning to the record UK average house price seen in March.” House prices reached a high of £256,000 in March.

Over the year to May, house prices increased 9.7% in England to £271,000; by 13.3% in Wales to £184,000; by 12.1% in Scotland to £171,000; and by 6.0% in Northern Ireland, to £149,000.

The strong run in UK house prices has been fuelled by pent-up demand, homeowners reviewing housing needs in light of the pandemic and the stamp duty holiday. Introduced by the chancellor last year, the tax break was originally scheduled to end in March but is now being tapered out. The threshold fell to £250,000 last month and will return to £125,000 at the end of September.

Roger Evans, director of home finance at Gatehouse Bank, said: “House price growth has return to form, bouncing back from the one-off fail in April, and we expect a further rise next month as the full impact of the stamp duty holiday extension emerges.

“Even with the biggest tax savings now behind us, there are no indications prices are going to slip back to where they were before the pandemic. Mortgage approvals – a primary indicator of how active the market is – still surpass pre-pandemic levels, highlighting that the stamp duty holiday is no longer the primary driver for home purchases.”

Jonathan Hopper, chief executive of Garrington Property Finders, said: “Such rapid price growth cannot continue forever, and this data may well have captured the high water mark of price inflation.

“With the stamp duty holiday now ended in Wales and Scotland, and tapering away in England and Northern Ireland, the temporary stimulus it provided is fading.

“From here on in, prices are likely to be drive by the more conventional market dynamics of demand and supply.”

The ONS house price index is calculated using data from HM Land Registry, Registers of Scotland, and Land and Property Services Northern Ireland.

Related articles

Aldi and Lidl win UK Christmas battle

Aldi and Lidl win UK Christmas battle

(Sharecast News) - German discounters Aldi and Lidl performed best in December, according to data from retail expert Kantar, which said a record £13.7bn was spent at British supermarkets over the four weeks ended 24 December. Kantar recorded Lidl's sales growth at...

UK house prices fall 1.8% YoY in December – Nationwide

UK house prices fall 1.8% YoY in December – Nationwide

(Sharecast News) - UK house prices fell by a higher-than-expected 1.8% year on year in December, mortgage lender Nationwide said on Friday, as higher borrowing costs and deposit requirements deterred buyers. Expectations were for a 1.4% fall. Prices remained flat on a...

Trending stories

Join our mailing list

Subscribe to our mailing list to receive regular updates!

x