Home prices rose 10 percent a year in May as buyers rushed to take advantage of the stamp-duty holiday — but experts warn they may now level off.
According to official figures from the ONS/Land Registry Office, the typical British home was worth £254,624 in May – an increase of £23,000 in just one year.
This was the highest house price inflation in nearly 14 years since just before the financial crisis in September 2007, according to the ONS/Land Registry report.
The Northwest was unveiled as the country’s real estate hotspot, with home prices rising 15.2 percent over the past year.
Sign of the times: UK average house prices are up 10 percent in the year to May
The average house price rose by 10 percent in May 2020, from 9.6 percent in April. On a monthly basis, the average rose by 0.9 percent.
On the ONS index, however, it remains just below the record £256,000 set in March this year.
House prices have exploded in the past year as a result of a wave of moving demand.
This was further fueled by the government’s stamp duty, which allowed buyers to save up to £15,000 in tax on home purchases until 30 June. They can save up to € 2,500 until September 30.
Experts say the housing market has cooled slightly and house prices may now ‘plateau’, although they don’t predict a dramatic decline.
That said, they advised buyers and sellers to brace themselves for the “volatility” of the price in the coming months.
Iain McKenzie, CEO of real estate agency The Guild of Property Professionals, said: “All good things must come to an end, and these numbers reflect the latest frenzy to make the most of government incentives to buy in the month before the stamp duty holiday.” . started to be scaled back.’
The ONS / Land Registry index shows the average house price accelerating over five years
Scott Taylor-Barr of Shropshire-based financial advisor Carl Summers Financial Services added: “July has already seen a marked decline in activity levels as for many the stamp duty boat has now sailed.
“In the future, I think we will see a cooling of the housing market, with prices stabilizing. That may not be a bad thing after the price increases of the past year.’
A fall in house prices would be a good thing for first-time buyers looking to climb the ladder.
But the rise in house prices was also caused by the historically low mortgage rates, which are still available. Those with large deposits or stocks can access rates as low as 0.94 percent.
In Bridgeyate, near Bristol, this three bedroom house is on Rightmove for £475,000
This three bedroom detached house in Chandler’s Ford, Hampshire is available for £425,000
A two bedroom apartment in this Sheffield building is on Rightmove for £124,950
In Nantwich, Cheshire, buyers can buy this four bed house for £375,000
This two bedroom semi-detached house in Lincoln is on Rightmove for £200,000
In Huntingdon, Cambridgeshire, this five bedroom, three bathroom house is listed for £950,000
“The understandable concern is that prices will fall, but low interest rates and a rapidly recovering economy support long-term price power,” said John Eastgate, director of real estate finance at Shawbrook Bank.
“That said, we shouldn’t be surprised if there is short-term volatility, especially if we look back and compare to the past few months.”
The Northwest has seen the largest house price growth of all regions, according to Land Registry, as values rose 15.2 percent in the year to May 2021.
The lowest annual growth rate occurred in London, where prices rose 5.2 percent as workers no longer need to go to the office due to the pandemic and decided to move to more suburban and rural areas.
At the national level, the largest annual house price growth in the period up to May 2021 was recorded in Wales, where house prices rose by 13.3 percent.
But month on month, Scotland saw a staggering 5.4 percent price increase between April and May alone.
House price inflation was last this high at the height of the property boom in the early 2000s
Detached and terraced houses have seen the largest price increase.
The typical detached house in the UK is now worth £391,656, up 11.3 per cent in value in a year, while terraces are up 11.4 per cent to £208,810.
Flats grew more moderately as buyers sought more space and gardens when tied to their homes during periods of closure. Prices have risen by 6.5 percent since May 2020.
Experts predicted that this trend for larger homes would continue to support house prices to some extent for the rest of this year and perhaps beyond.
Tomer Aboody, director of real estate provider MT Finance: ‘Stamp holiday or not, top properties with good outdoor space, including space to work from home and not too far from the station or office to allow commuting where necessary, will always be in demand. are with several buyers who are willing and able to pay.’
New builds have also taken a higher price, with the typical price rising 12.2 per cent since May 2020 and more than 5 per cent in the past month alone to £325,483.
Existing homes have increased in value by 9.7 percent to £251,199.
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