House prices increase 10% year-on year

The average house price in the United Kingdom rose 10% over the year to May 2021, according to figures from the Office of National Statistics and the Land Registry.

The figures released today, show the average house price was £254,624, an increase on April of 0.9%. The average price is however slightly below the £256,000 reported for March.

Average house prices increased 9.7% over the year in England, 13.3% in Wales to £184,000, 12.1% in Scotland to £171,000 and 6% in Northern Ireland to £149,000.

London saw the lowest annual growth, of 5.2%, for the sixth consecutive month.

Despite the high annual increase, many commentators are expecting the market to slow down, partly as a result of the Stamp Duty tax relief cut at the end of June.

Tom Bill, head of UK residential research at Knight Frank , said: “Despite house price growth reaching double-digits, the second half of the year is unlikely to bear much resemblance to the first half for the UK housing market. We expect growth to fall to mid-single digits as tax breaks wind down and supply picks up”

Jonathan Hopper, chief executive of Garrington Property Finders, said the May data might be the ‘high water-mark’ of house 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 fast, “ he said.

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

In England, the threshold at which buyers are required to pay stamp duty was reduced at the end of June from £500,000 to £250,000 for three months. It will then be cut its pre-pandemic level of £125,000 on 30 September as the covid-19 payment ‘holiday’ comes to an end.

Halifax last week said that the approach of the Stamp Duty relief deadline on 30 June led to a 0.5% price decrease in June