The latest HM Land Registry statistics showed average house prices increased by 10% in May compared to the same month in 2020.
It means the average house price according to the government department, which registers ownership of land and property in England and Wales, was at £254,624 in May – 0.9% higher than in April.
The increasing popularity for homes with more space has meant detached homes in England increased in value by 11% over the past year. Meanwhile in Wales the average detached property experienced a 14% price hike.
The data also provided further evidence of the growing trend for moving away from city centres, with London prices falling by 0.7% between April and May 2021.
Average prices in the North West of England grew the most over the year, climbing by 15.2% while London experienced the lowest annual increase of 5.2%.
Good and bad news
The stamp duty holiday, introduced in July 2020, coupled with homeowners’ increased desire to move having spent more than their usual time at home during the lockdown, is being cited as the main driver of price inflation.
Stuart Law, CEO of the Assetz group, said this scenario created both pros and cons for the market.
He explained: “While rising house prices are a positive sign of economic recovery following the impact of multiple lockdowns over the last 18 months, we don’t want to see the market overheat too much.
“An ideal range of 2% to 3% annual growth would be beneficial to most market players, but it can often be difficult to stay within this sweet spot for a sustained period of time.”
Indeed, Karen Noye, a mortgage expert at financial adviser Quilter, said this environment was not ideal for first-time buyers.
“While this will not be good news for many homeowners, first-time buyers who have been completely priced out of the market, may find it easier if prices start to come down as we head into the winter and beyond,” she said.
“The 95% mortgage scheme has been a lifeline for many first-time buyers but those who have been able to use it should be mindful that a significant drop in prices could leave them with the very real problem of negative equity and all the headaches that come with it.”
Loading ...