House prices soar by 9.5% as buyers seek larger homes and gardens after Covid lockdown
- Average home now costs a new record high of £261,743, according to Halifax
- The pandemic has boosted the demand for larger properties and garden space
- Wales has had fastest rate of growth over the last year, followed by North West
House prices have soared by almost 10 per cent over the past year as the pandemic boosts demand for larger properties and gardens.
The average home now costs £261,743, according to the Halifax bank’s May House Price Index – a new record high.
This was a rise of 9.5 per cent over the past year, meaning the average home will now fetch £22,000 more than it would have in May 2020.
This takes the level of house price inflation to its strongest in almost seven years.
And, over the past month alone, a standard property has increased by 1.3 per cent – more than £3,000.
The average home now costs £261,743, according to the Halifax bank’s May House Price Index
It comes a week after figures from Nationwide showed that the price of a typical UK home was up by 10.9 per cent in 12 months, the biggest annual rise since August 2014.
According to Halifax, Wales has seen the fastest rate of growth over the past 12 months. This is closely followed by the North West and the Yorkshire and Humber region as locked-down homeowners hunted for more space and outdoor access.
The Government’s stamp duty holiday, introduced when the pandemic hit last year, has also fuelled the rapid rise in prices.
Buyers will now be rushing to take advantage of the tax break before it begins to taper off at the end of this month, ending entirely on September 30.
But the South of England, which has traditionally been the growth engine of UK housing prices, is lagging behind – especially in Greater London where prices are up just 3.1 per cent.
Russell Galley, managing director at Halifax, said these prices likely reflected the shift in preference for properties with more space as well as Brexit’s impact on the capital. But he added that prices could be pushed even higher across the country as lockdown restrictions have led to a bigger savings build-up for homebuyers.
Mr Galley continued: ‘While 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.
‘Greater demand for larger properties with more space might warrant an increased willingness to spend a higher proportion of income on housing.’
Lucy Pendleton, a property expert at estate agents James Pendleton, said: ‘The inability of Britons to go on holiday means there’s no distraction now from executing that ambitious move to a larger home.
‘We’re entering a time of year when school holidays and foreign trips normally force the market to drop to a slightly slower pace.
‘That’s not necessarily going to happen this year.’
However, she added that ‘sustained, strong demand’ over the next few months could have ramifications when the market cools in the autumn, delivering what might look like a more rapid slowdown.