Annual house price growth exceeds 10% in May

Annual house price growth exceeds 10% in May
Annual house price growth rose to its highest level for seven years last month, with shifting housing preferences and the Stamp Duty holiday continuing to drive activity.

Prices were up 1.8% month-on-month, according to Nationwide Building Society’s latest house price index, with annual house price growth soaring to 10.9%. The average price of a property is £242,832, the building society said, up £23,930 over the past 12 months.

Robert Gardner, Nationwide’s chief economist said: “Our research indicates that the extension to the stamp duty holiday is not the key factor, though it is clearly impacting the timing of transactions.

“Amongst homeowners surveyed at the end of April that were either moving home or considering a move, three quarters (68%) said this would have been the case even if the stamp duty holiday had not been extended.”

Nationwide’s research shows that of those moving or considering a move, around a third (33%) were looking to move to a different area, while 30% wanted access to a garden or outside space.

“Housing market activity is 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 with many people still motivated to move as a result of changing housing preferences in the wake of the pandemic,” said Mr Gardner.

Demand boosts mortgage competition

High demand for properties has resulted in a more competitive mortgage market and has boosted lender confidence. Recent pricing movement has seen some providers including Nationwide, TSB and Platform release rock bottom fixed rates below 1%.

When choosing a mortgage, don’t be tempted by the headline rate alone. Many of the lowest rate deals come with hefty arrangement fees, which can significantly bump up the overall cost. If you’re not sure which mortgage deal to choose, seek professional advice from a broker who can recommend the most cost-effective options for you based on your individual circumstances.

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