UK annual house price growth hits double digits in May

According to the report from Nationwide Building Society, UK annual house price growth rises to 10.9% in May, the highest level in nearly seven years. Economists had expected a 9.2% increase. Prices up 1.8% month-on-month, following a 2.3% rise in April. Economists had expected a 0.8% increase. New record average price of £242,832, up £23,930 over the past twelve months.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “May saw a further acceleration in annual house price growth to 10.9%, the highest level recorded since August 2014. In month-on-month terms, house prices rose by 1.8% in May, after taking account of seasonal effects, following a 2.3% rise in April. The market has seen a complete turnaround over the past twelve months. A year ago, activity collapsed in the wake of the first lockdown with housing transactions falling to a record low of 42,000 in April 2020. But activity surged towards the end of last year and into 2021, reaching a record high of 183,000 in March. While March’s spike in transactions was driven by the original end date of the stamp duty holiday, a lot of momentum has been maintained. 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. It is shifting housing preferences which is continuing to drive activity, with people reassessing their needs in the wake of the pandemic".