Property prices at new record after 9.5 per cent rise in May

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<p>Halifax said annual house price inflation was at its strongest level in nearly seven years</p> (PA Archive)

Halifax said annual house price inflation was at its strongest level in nearly seven years

(PA Archive)

House prices increased by 9.5 per cent annually in May to reach a new record high of £261,743 on average, according to an index.

Halifax said annual house price inflation was at its strongest level in nearly seven years. London saw a 3.1 per cent annual surge, making the average property worth £509,621.

Across the UK, house prices increased by 1.3 per cent month-on-month.

Russell Galley, managing director at Halifax, said: “House prices reached another record high in May, with the average property adding more than £3,000 (1.3 per cent) to its value in the last month alone. A year on from the first easing of national lockdown restrictions, and the gradual reopening of the housing market, annual growth surged to 9.5 per cent, meaning the average UK home has increased in value by more than £22,000 over the past 12 months.” He said the stamp duty holiday has boosted activity.

Mr Galley added that for some buyers lockdown restrictions had “resulted in an unexpected build-up of savings, which can now be deployed to fund bigger deposits for bigger properties”.

He also saw the strong prices as pointing to “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”.

All UK nations and regions except the north east of England witnessed an acceleration in annual house price inflation in May, he added.

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