UK house prices increased by 10.0% in the year to May 2021, up from 9.6% in April 2021. On a non-seasonally adjusted basis, average house prices in the UK increased by 0.9% between April and May 2021, compared with an increase of 0.5% during the same period a year earlier (April and May 2020).

House price growth was strongest in the North West where prices increased by 15.2% in the year to May 2021. The lowest annual growth was in London, where prices increased by 5.2% in the year to May 2021.

The Royal Institution of Chartered Surveyors’ (RICS) May 2021 UK Residential Market Survey reported that increasing demand and a decrease of new instructions continues to drive house prices higher.

Mortgages for Business – MPU

The Bank of England’s Agents summary of business conditions 2021 Q2 reported ongoing strong demand for housing across most of the UK and a shortage of properties for sale, which pushed up prices.

The UK Property Transactions Statistics showed that in May 2021, on a seasonally adjusted basis, the estimated number of transactions of residential properties with a value of £40,000 or greater was 114,940. This is 138.2% higher than a year ago. Between April and May 2021, UK transactions decreased by 3.8% on a seasonally adjusted basis.

The Bank of England’s Money and Credit May 2021 release reported that mortgage approvals for house purchases (an indicator of future lending) in May 2021 was 87,500, which is up slightly from April 2021 but lower than a recent peak of 103,400 in November 2020.

Average house prices in the UK increased by 10.0% in the year to May 2021, up from 9.6% in April 2021.

At the country level, the largest annual house price growth in the year to May 2021 was recorded in Wales, where house prices increased by 13.3%.

Scotland saw house prices increase by 12.1% in the year to May 2021.

England saw house prices increase by 9.7% in the year to May 2021.

Northern Ireland saw house prices increase by 6.0% over the year to Quarter 1 (January to March) 2021.

Average price by country and government office region

Country and government office region Price Monthly change Annual change
England £271,434 0.4% 9.7%
Northern Ireland (Quarter 1 – 2021) £149,178 1.1% 6.0%
Scotland £171,448 5.4% 12.1%
Wales £184,297 0.8% 13.3%
East Midlands £216,077 -0.2% 11.0%
East of England £310,200 -1.0% 6.9%
London £497,948 -0.7% 5.2%
North East £143,129 1.4% 11.8%
North West £189,245 1.4% 15.2%
South East £350,016 1.4% 9.1%
South West £277,603 -0.6% 8.4%
West Midlands Region £219,793 0.8% 9.8%
Yorkshire and The Humber £181,856 0.8% 10.2%

On a non-seasonally adjusted basis, average house prices in the UK increased by 0.9% between April and May 2021, compared with an increase of 0.5% during the same period a year earlier (April and May 2020). On a seasonally adjusted basis, average house prices in the UK increased by 0.5% between April and May 2021.

Average price by property type

Property type May 2021 May 2020 Difference
Detached £391,656 £351,885 11.3%
Semi-detached £242,634 £221,064 9.8%
Terraced £208,810 £187,513 11.4%
Flat or maisonette £215,731 £202,515 6.5%
All £254,624 £231,508 10.0%

Sales volumes

Country March 2021 March 2020
England 80,257 57,626
Northern Ireland (Quarter 1 – 2021) 2,244 1,788
Scotland 11,968 6,447
Wales 3,515 3,340

New build and existing resold property

Property status Average price March 2021 Monthly change Annual change
New build £325,483 5.1% 12.2%
Existing resold property £251,199 1.5% 9.7%

Buyer status for Great Britain

Type of buyer Average price May 2021 Monthly change Annual change
First time buyer £213,336 0.7% 9.5%
Former owner occupier £296,872 1.1% 10.7%

Funding status for Great Britain

Funding status Average price May 2021 Monthly change Annual change
Cash £241,266 1.0% 10.0%
Mortgage £265,914 0.9% 10.1%

Director of Benham and Reeves, Marc von Grundherr, commented:

“It’s clear that the extension of the stamp duty holiday caused the market to rebound immediately from the decline in market performance seen as a result of the original deadline.”

“Of course, it’s simply irresponsible to measure the health of the market based on a metric as erratic as the monthly rate of house price growth and anyone who seeks to do so would do well to retire their crystal ball to the cupboard from which it came.”

“The real proof in the pudding is the extremely strong performance seen on an annual basis and one that continues to defy expectation despite fears the market could soon run out of steam.”

“While London continues to trail the rest of the market in this respect, we’re beginning to see the cogs start to turn, driven by a return to the workplace and preemptive demand from foreign buyers in anticipation of a move later in the year.”

“As a result, the London property market will continue to build momentum long after the carrot of a stamp duty reprieve has been removed.”

Managing Director of Barrows and Forrester, James Forrester, commented:

“The property market continues to move forward at an alarming pace, powered by a full tank of buyer demand and a shortage of housing stock to satisfy this hunger for homeownership.”

“While the end of the stamp duty holiday may well act as a slight bump in the road, it will take far more than a marginal decline in homebuyer sentiment to cause the wheels to fall off.”

Managing Director of Ascend Properties, Ged McPartlin, commented:

“House prices continue to boom, with the North West sitting on pole and driving market performance in this respect.”

“It’s clear that the north-south divide has never been wider and while this momentous rate of price growth must inevitably slow at some point, we expect this vast difference in property pedigree to remain as buyers in the North continue to benefit from a far more affordable market, with, or without the benefit of a stamp duty saving.”

Ross Counsell, chartered surveyor and director at GoodMove, on today’s ONS House Price Index:

“According to ONS’s latest statistics, UK average house prices have increased again by 10% over the year to May 2021 and now stand at £255,000 in the UK – nearly reaching the peak of £256,000 seen in March 2021.”

“In England, house prices are soaring at £271,000 (+9.7%), compared to £184,000 in Wales (+13.3%), £171,000 in Scotland (+12.1%) and £149,000 in Northern Ireland (+6%).”

“London continues to be the region with the lowest annual growth for the sixth consecutive month, now standing at 5.2%. And at £498,000, average house prices in the Capital also remain the most expensive in the UK.”

“We predict the low growth as an aftermath to people moving out of the cities during lockdown, but partnered with exceedingly high house prices makes for a difficult property market, especially for anyone looking to buy in the city.”

“So, why are these prices still so exceedingly high?”

“Well, that could be because these figures released are from May 2021 – a month before the Stamp Duty holiday deadline came into force at the end of June (at least in its current format – there will be a staggered reduction in rates until September).”

“By the time the next HPI is announced, we should hopefully begin to see house prices lowering.”

“This is because less people will be rushing to buy a property before the Stamp Duty Holiday deadline, and the new figures should reflect this.”

“Demand for properties should decline slowly from June to September, and more noticeable from October onwards once the Stamp Duty Holiday officially ends.”

“With less demand comes cheaper house prices, so we should hopefully see more ‘normal’ house prices towards the end of the year and into 2022.”

“For anyone looking to buy a home, I’d strongly advise to hold off until then as the market should be far more attainable.”

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