UK house prices hit fresh record high

UK house prices reached another record high in May, according to Halifax, with the property market remaining "buoyant" headed into the summer.

Halifax's house price index for may revealed on Monday that annual house price inflation was now at its strongest level in nearly seven years, with the average UK property price coming in at £261,743 last month - up 1.3% on April, 2.4% on the prior quarter and 9.5% year-on-year to a new record high.

The report also revealed that Wales continued to be the region with the strongest price growth, up 11.9% over the past twelve months for the area's biggest gain since April 2005, closely followed by the North West and Yorkshire & Humber, both of which posted double-digit annual growth.

Halifax managing director Russell Galley said: "Heading into the traditionally busy summer period, market activity continues to be boosted by the government's stamp duty holiday, with prospective buyers racing to complete purchases in time to benefit from the maximum tax break ahead of June's deadline, after which there will be a phased return to full rates. For some homebuyers, lockdown restrictions have also resulted in an unexpected build-up of savings, which can now be deployed to fund bigger deposits for bigger properties, potentially pushing property prices even higher.

"Whilst these effects will be temporary, the current strength in house prices also points to a deeper and long-lasting change as buyer preferences shift in anticipation of new, post-pandemic lifestyles – as greater demand for larger properties with more space might warrant an increased willingness to spend a higher proportion of income on housing. These trends, coupled with growing confidence in a more rapid recovery in economic activity if restrictions continue to be eased, are likely to support house prices for some time to come, particularly given the continued shortage of properties for sale."