UK house prices rose 10% in the year through May, the fastest rate since before the 2008 financial crisis, as buyers rushed to take advantage of the duty holiday stamp in parts of the country.
Data from the Office for National Statistics puts the average price of a property at £ 254,624. The annual growth appears to have been driven by the desire of buyers for larger homes and outdoor space, and by the largest stamp duty savings on homes in England and Northern Ireland priced at $ 500,000. £ and more.
The average price of an apartment rose 6.5% year on year to £ 215,731, and the average cost of a detached house rose 11.3% to £ 391,656.
The figures, which are based on closed and recorded sales, show people moving to see the biggest price increase, with former owner-occupants paying an average of £ 296,872, 10.7% more than in May 2020.
But for first-time buyers, there has also been a substantial increase. New entrants to the market paid an average of £ 213,336 for homes in May, 9.5% more than the previous year.
These buyers have reportedly already received stamp duty relief in England on homes costing up to £ 300,000, so many will not have benefited from the temporary tax break.
The stamp duty holiday in England and Northern Ireland began to be abolished on June 30 and ended on the same date in Wales.
Nationwide’s latest housing market report suggested that prices continued to rise in June, despite the looming deadline. Its figures, which relate to agreed mortgages and not concluded sales, showed annual price inflation at its highest level in 17 years.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “Double-digit house price increases have reached sky-high highs we last saw just before the onset of the financial crisis, but it could be as good as it gets for a while.
“We don’t expect sharp drops, but the increases are unlikely to be that steep in the next few months. While homeowners may miss the increase in their wealth, it could be a blessed relief for buyers. “
Jamie Durham, an economist at PwC, said the stamp duty was not the only factor driving prices up, and he expected growth of 5-7% for the year.
“The market continues to be supported by a shift in preferences towards more spacious properties,” he said. “It was also supported by household savings during the pandemic, estimated at around £ 7,800 per adult, and interest rates still low. We expect these forces to support price growth over the next few months, but at a slower pace than we saw in the first half of 2021. ”