House prices in the UK saw a 1.1% increase during May, based on the latest figures from the HM Land Registry’s House Price Index (HPI).
This rise comes after a notable decline of 2.7% between March and April, suggesting a rebound in the property market.
Looking at the year-on-year data, property values were up by 3.9%. The average price of a home across the UK now sits at approximately £269,000.
Reaction:
Marc von Grundherr, director of Benham and Reeves:
Recent sold price data reveals that house price growth made a comeback in May, following a short dip after the latest stamp duty deadline passed.
This bounce-back shows that buyers across the UK are still keen to move forward with their property plans, even with the added cost of higher stamp duty. Their enthusiasm remains strong despite the financial challenges.
On a yearly scale, the market also shows signs of resilience. House prices are still higher than they were this time last year, holding firm in the face of ongoing economic pressures.
Verona Frankish, CEO of Yopa:
The latest house price figures for May show that the property market is gaining strength and moving forward with confidence. Now that the recent stamp duty deadline has passed, there’s room for the momentum built over recent months to continue.
This steady resilience forms a strong foundation for future price growth. It’s a positive sign that the market is in a healthy position despite recent economic challenges.
Further encouragement comes from the Government’s newly announced mortgage market reforms. These updates aim to make it easier for more people to secure lending by loosening mortgage criteria.
With more buyers likely to be drawn into the market, these reforms are expected to support house price growth not just for the rest of this year, but well into the future.
Jason Tebb, president of OnTheMarket:
Although the data is slightly historic, it still shows that house prices were up annually in May. On average, property values were £10,000 higher than they were at the same time last year. However, rising prices are being tempered somewhat by ongoing affordability issues.
Despite this, the housing market is proving to be remarkably resilient. One factor helping to sustain this stability is the series of interest rate cuts—four in total—since last August.
These rate reductions have improved confidence among both buyers and sellers, leading to increased activity in the housing market. This uptick in movement is also having a positive effect on the wider economy.
However, the recent and unexpected rise in inflation to 3.6% in June may cause the Bank of England to reconsider any immediate plans for further interest rate cuts. Much will depend on other economic indicators, such as employment data.
At the same time, the relaxation of mortgage lending rules is a clear attempt to help with affordability and encourage more first-time buyers. While this shows an awareness of the challenges people face when trying to buy a home, it remains to be seen whether these changes will be enough to make a meaningful impact.
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