House prices jumped by an annual 10.9%, the most in nearly seven years, and they look set to accelerate further as people seek new homes after the pandemic, mortgage lender Nationwide said.
Prices rose 1.8% month-on-month, following a 2.3% rise in April and it means a new record average price of £242,832, up £23,930 over the past twelve months.
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:
“May saw a further acceleration in annual house price growth to 10.9%, the highest level recorded since August 2014. In month-on-month terms, house prices rose by 1.8%
in May, after taking account of seasonal effects, following a 2.3% rise in April.
“The market has seen a complete turnaround over the past twelve months. A year ago, activity collapsed in the wake of the first lockdown with housing transactions falling to a
record low of 42,000 in April 2020. But activity surged towards the end of last year and into 2021, reaching a record high of 183,000 in March.
“Housing market activity is likely to remain fairly buoyant over the next six months as a result of the stamp duty extension and additional support for the labour market
included in the Budget, especially given continued low borrowing costs, improving credit availability and with many people still motivated to move as a result of changing
housing preferences in the wake of the pandemic, as highlighted above.
“With the stock of homes on the market constrained, there is scope for annual house price growth to accelerate further in the coming months, especially given the low base for
comparison in early summer last year.”
