Halifax has reported that house prices reached another record high in May, with the average property adding more than £3,000 (+1.3%) to its value in the last month alone.
The average price of a home is now £261,743.
Russell Galley, managing director at Halifax, said: “A year on from the first easing of national lockdown restrictions, and the gradual reopening of the housing market, annual growth surged to 9.5%, meaning the average UK home has increased in value by more than £22,000 over the past 12 months.
“Heading into the traditionally busy summer period, market activity continues to be boosted by the government’s stamp duty holiday, with prospective buyers racing to complete purchases in time to benefit from the maximum tax break ahead of June’s deadline, after which there will be a phased return to full rates. For some homebuyers, lockdown restrictions have also resulted in an unexpected build-up of savings, which can now be deployed to fund bigger deposits for bigger properties, potentially pushing property prices even higher.
“Whilst these effects will be temporary, the current strength in house prices also points to a deeper and long-lasting change as buyer preferences shift in anticipation of new, post-pandemic lifestyles – as greater demand for larger properties with more space might warrant an increased willingness to spend a higher proportion of income on housing.
“These trends, coupled with growing confidence in a more rapid recovery in economic activity if restrictions continue to be eased, are likely to support house prices for some time to come, particularly given the continued shortage of properties for sale.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “Once again, we see Halifax figures reflecting similar results to the Nationwide and other surveys before it but this is reflecting activity from a few months ago rather than now. It is still very busy on the ground but supply is starting to redress the balance with demand. We notice too from connected chains that activity is even stronger in areas outside London where affordability is greater.
“Those who have little chance of making the stamp duty deadline are already considering ways of negotiating their way to completing transactions. We expect activity to settle but not drastically change in the next few months.”