UK property asking prices hit a high of more than £333,000 in May as the boom triggered by the response to the pandemic spurred high demand in northern England and Wales, Rightmove said.
The average asking price rose 1.8% from April to reach £333,564 as demand outstripped the number of properties coming up for sale, which was similar to the long-term average.
Demand was particularly high in northern England and Wales, causing big price increases while London prices virtually froze. This is a reversal of the normal trend when prices rise rapidly with London usually leading the increase.
The UK property market has been in a mini-boom since early summer 2020 when Chancellor Rishi Sunak announced a stamp duty holiday on the first £500,000 of a purchase that prompted a race to buy before the initial deadline of 31 March. In March Sunak extended the tax break, which covers England and Wales, for three months a further three months of tapering, setting off a fresh wave of purchases.
Households are also rethinking their housing needs in the expectation of working from home. Many are leaving London for bigger properties in coastal towns and properties further north.
Wales had the strongest growth in May as prices rose 13% from a year earlier followed by the north west of England, up 11.1%, and Yorkshire and the Humber, where asking prices rose 10.5%, Rightmove said. Average prices in London are 2.9 times higher than in the north but the gap is the smallest since 2013, Rightmove said.
Tim Bannister, Rightmove’s director of property data, said: “Last year’s unexpected mini-boom is rolling on into 2021, with new price and market activity records again defying many predictions. Buyer affordability is increasingly stretched, but there’s obviously some elasticity left to stretch a bit more as many buyers are squeezing their way into higher price bands.
“The pandemic has given a greater focus on the home, and in 2020 we saw a surge in southern coastal and rural areas. So far 2021 is proving to be the year of the northern mover, not only satisfying their pent-up housing needs, but in doing so also narrowing some of the huge price gap with London.”
Mark Manning, who runs Yorkshire-based estate agent Manning Stainton, said demand was boosted by large numbers of buyers coming from other parts of the country, especially the south.
“This surge in buyer activity combined with a relative shortage of new properties coming to market has had the inevitable effect of creating a significant surge in prices with buyers clamouring to get their hands on most listings that hit the market,” he said.
