UK house prices could continue to rise despite reaching historic levels.
According to Halifax the average sale price rose £ 22,000 year over year.
House prices are likely to continue rising for some time despite hitting a new record in May, said one of Britain’s biggest mortgage lenders.
The monthly snapshot of the Halifax property market showed a 1.3% rise in the cost of a home in May, bringing the median sales price to a record £ 261,743 as home buyers scrambled to complete purchases before that the stamp duty holiday begins to run out at the end of this month.
Halifax said nearly £ 22,000 had been added to the median house price since May 2020, when the UK experienced the first easing of national closing restrictions and the gradual reopening of the housing market after a temporary freeze. It marks an annual increase of 9.5%, the fastest growth rate in seven years.
The report echoes similar findings from a survey conducted by Nationwide last week, which showed prices rose 10.9% year-over-year, the fastest rate since August 2014.
“The stamp duty holiday has taken house prices to new all-time highs.”
Halifax Managing Director Russell Galley said: “As we enter the traditionally busy summer period, market activity continues to be driven by the government stamp duty holiday, with prospective buyers rushing to complete purchases in time for benefit from maximum tax exemption before June deadline, after which there will be a gradual return to full rates.”
He said prices could continue to rise after the end of June as some Britons had accumulated “unexpected” savings during the shutdown that could now be used to finance larger deposits in larger properties.
That adds to a fundamental shift in the kinds of homes buyers are looking for in light of the pandemic, which has ushered in a work-at-home boom and fueled interest in larger homes with gardens outside of downtown cities.
“These trends, coupled with growing confidence in a faster recovery in economic activity if restrictions continue to ease, are likely to support house prices for some time, particularly given the continuing shortage of properties for sale,” Galley said.
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