Annual house price growth accelerated to 12.8% over the 12 months to May, according to the latest UK House Price Index from the Office for National Statistics (ONS).
This is up from 11.9% in the year to April, and 9.7% that the ONS reported in the year to March.
Average house prices in the UK also increased on monthly basis by 1.2% between April and May, compared with an increase of 0.4% during the same period a year ago. These latest figures took the average UK house price to £283,000 in May, a level £32,000 higher than the same time last year.
According to the latest index from the ONS, average house prices have now increased over the year by 13.1% in England to £302,000, 14.4% in Wales to £212,000, 11.2% in Scotland to £188,000, and 10.4% in Northern Ireland to £165,000. London is still the region with the lowest annual growth at 8.2%, although this figure was also up from 7.9% last month.
CEO at fintech broker Loan.co.uk, Paul McGerrigan, commented: “This has been an exceptional time for the property market which has shown phenomenal price growth despite challenging financial times.
“A dearth of supply, the continued trend toward remote working, the need for extra space and a buoyant buy-to-let market are still outweighing the negative factors of inflation, rising mortgage rates and uncertainty. The question is for how long.
“With inflation figures showing a further rise to 9.4% today, this will continue to drive interest rate hikes by the Bank of England’s Monetary Policy Committee. A rising rate market will at some point cool the market but for now buyers’ desires are the strongest factor.”
Head of lender relationships at Legal & General Mortgage Club, Danny Belton, added: “Though house prices are no longer rocketing at the rapid rate that we have come to expect throughout the past two years, they are far from plummeting to a crash landing either.
“The cost of living crisis will inevitably drain some of the fuel for further growth, but our market enjoys strong and stable demand, so we could still see small increases to prices before the year is out.”
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