Annual house price growth hit double digits in May, rising 10.9% year-on-year to a new record average price of £242,832 – its highest level in almost seven years.
On a monthly basis, prices were up 1.8%, following a 2.3% rise in April, with the market seeing a complete turnaround over the past twelve months after housing transactions fell to a record low of 42,000 in April 2020 in the wake of the first Covid-19 lockdown.
Around a third of Britons moving or considering a move were looking to move to a different area, according to Nationwide’s UK house price index, with nearly 30% doing so to access a garden or outdoor space more easily.
Nationwide also stated housing market activity was likely to remain “fairly buoyant” over the next six months as a result of the stamp duty extension and additional support for the labour market included in the Budget, especially given continued low borrowing costs, improving credit availability and people still being motivated to move as a result of changing housing preferences in the wake of the pandemic.
“With the stock of homes on the market constrained, there is scope for annual house price growth to accelerate further in the coming months, especially given the low base for comparison in early summer last year,” said Nationwide’s Robert Gardner.
“Further ahead, the outlook for the market is far more uncertain. If unemployment rises sharply towards the end of the year as most analysts expect, there is scope for activity to slow, perhaps sharply, though even this could potentially be offset by ongoing shifts in housing preferences, if current trends are maintained.”
