House prices increased by nearly £3,000 last month, according to the latest data from Nationwide Building Society.
In May, the average property price reached £273,427, up from £270,752 in April, showing a steady rise. This means that values are now 3.5 per cent higher than they were a year ago and are nearing the peak seen in August 2022, when prices hit £273,751.
The recent increase in prices suggests that the stamp duty changes introduced at the start of April have had little effect on the behaviour of homebuyers.
Robert Gardner, Nationwide’s chief economist, explained that official figures showed a significant surge in property transactions during March. Buyers appeared to have brought forward their purchases to avoid higher stamp duty fees.
He added that owner-occupier house purchase completions were around twice the usual level and marked the highest since June 2021, another period influenced by stamp duty adjustments.
He added that mortgage approval figures indicate the housing market is maintaining good momentum even after the stamp duty holiday ended.
Despite ongoing uncertainties in the global economy, the basic conditions for prospective homebuyers in the UK continue to be favourable.
Unemployment levels remain low, wages are increasing at a solid rate—even when adjusted for inflation—and household finances are generally strong. Additionally, borrowing costs could ease slightly if the Bank of England decides to lower interest rates further.
Tom Bill, head of UK residential research at Knight Frank, commented that while there are some ‘tentative signs of momentum’ in the housing market, a dramatic rebound in prices does not seem likely in the near future. He pointed out that ongoing concerns around inflation, combined with the government’s limited financial capacity, mean that mortgage rates are unlikely to fall significantly anytime soon.
Bill also highlighted that buyers currently face a broad selection of properties to choose from this spring. This abundance of options is expected to keep downward pressure on house prices for the short term, as sellers may need to be more competitive to attract buyers in a market that is not overheated.
Meanwhile, Jonathan Hopper, chief executive of Garrington Property Finders, emphasised that regional differences are playing a major role in how house prices are behaving across the UK. In parts of London and much of southern England, the supply of homes for sale now greatly exceeds demand, which is putting pressure on prices.
This oversupply is especially noticeable in more expensive and highly desirable areas, where what was once a limited supply of properties has now turned into a flood. Buyers in these locations are therefore blessed with a wide range of choices and greater bargaining power, which is leading to prices either remaining flat or even falling slightly.
On the other hand, in areas typically seen as offering good value—such as much of northern England—demand often outstrips supply. This imbalance is driving house prices up rapidly in those regions, as buyers compete for fewer available properties.
These contrasting trends highlight the complexity of the current housing market, where regional factors strongly influence price movements, and buyers’ experiences can vary greatly depending on location.
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