The average price for a home has swelled 10 per cent, according to official data today, as house price inflation continues.
London’s homeowners however might not feel the benefit, with prices jumping just 5.2 per cent in the year to May, the Office for National Statistics (ONS) said.
Property prices in the capital have the lowest annual growth in the UK for the sixth consecutive month, which may have dampened hopes for prospective sellers, but less so those eyeing the property ladder.
Prices have been on the rise for some time but showed signs of a slowdown last month as a pandemic-era stamp duty holiday comes to an end.
“The housing market has been running much hotter and faster than anyone expected, and despite a slight softening last month, today’s data shows there’s plenty of momentum still left,” managing director at estate agents Fine & Country, Nicky Stevenson, said.
“Low borrowing costs, reduced supply and an insatiable demand for bigger homes have spurred bidding wars and a spike in house values across the country.”
The average house price for those in England, outside of London, increased to £271,000 over the year. Northern Ireland saw the lowest rate of average house price growth.
The capital’s stunted price growth reflects Londoners facing an “affordability challenge with the average property in the capital costing nearly twice as much as the UK average,” according to PwC economist Jamie Durham.
“Stamp duty is not the only factor pushing prices up. The market continues to be supported by a shift in preferences towards more spacious properties,” he added, as detached house prices have surged 11.3 per cent over the past year.
Meanwhile, prices for flats – a Londoners essential – have only grown by 6.5 per cent.
However, ONS said that “because of the impact of the coronavirus (Covid-19) pandemic on both the number and supply of housing transactions, we might see larger revisions to the published House Price Index (HPI) estimates than usual.”
“While prices have dipped ever so slightly on their March peak, record amounts are still being paid across the country for our new homes,” chairman at property firm Jackson-Stops, Nick Leeming, said.
“This is a testament to the ground-breaking demand we have seen in the market over the past year, despite unparalleled economic uncertainty.”
Leeming added that so far, there is no evidence of activity “dropping off”, as analysts have feared the housing market boom may stir up a cliff edge for prices.
“With the work from home message due to be dropped next week, many will be considering how their new lifestyle can best fit with their return to the office,” the chairman added.
As such, many may be looking to relocate again or make their way back to the capital after it underwent a so-called exodus at the beginning of lockdown restrictions.
Stevenson agreed that the current “dizzying boom” shows no sign of slowing, however, property onlookers may begin to see growth ease later in the year as the stamp duty holiday is totally phased out.