UK house prices surge 3.9% in May

The average house price in the UK increased by 3.9% in the year to May, the Office for National Statistics (ONS) has found.

The non-ministerial department’s latest house price index (HPI) revealed that the average UK house price stood at £269,000 in May, increasing by 1.1% month-on-month.

Chief executive officer at Propertymark, Nathan Emerson, said that rising house prices can be used as an indicator of growth in the general house market.

However, he added that there is "still more work to do to boost Britain’s housing market".

Emerson stated: "There are many reports suggesting that the stamp duty hikes commencing from April this year are having a negative effect as some people are paying between £6,000-£12,000 more in charges, and there are even calls for more flexible stamp duty payment options too.

"Though this tax was increased to help balance the UK’s finances, other reports suggest these increases are deterring aspiring homeowners. The UK Government should listen to those working in the industry who are noticing the negative consequences this policy is having."

Northern Ireland was again the best performing region in the UK, with average house prices increasing by 9.5% to £185,037 in May.

Average house prices in Scotland (6.4%) and Wales (5.1%) increased to £191,927 and £209,580 respectively.

In England, the North East was the region with the largest annual increase in house prices, jumping by 6.3% to £159,142.

While London remained the most expensive region in the UK, its average house price increased by 2.2% year-on-year to £565,637, but dropped by 1.4% month-on-month.

Chief commercial officer at Atom bank, Chris Storey, stated that reductions in borrowing costs are making would-be purchasers "more confident".

He concluded: "Data from Moneyfacts shows that two-year fixed rates, for example, are now at the lowest levels since September 2022, while borrowers have an exceptional level of choice, with the second highest number of mortgage products available since 2007. That combination of keen pricing and wider availability is opening up the market to more buyers, and that sort of activity may push prices higher in the months ahead, particularly if - as expected - we see at least one more base rate cut, despite the rate of inflation remaining higher than expected.

"Further house price growth threatens to make life hard for those who have been unable to save a sizeable deposit. The changes to the high loan-to-income limits confirmed in yesterday’s Leeds Reforms, as well as the introduction of a permanent mortgage guarantee scheme should make that easier for lenders to do - it’s now all a question of attitude."



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