House prices jump 9.5% as buyers seek larger homes, Halifax says

UK house prices leapt another 9.5% in the year to May, boosted by the government's stamp duty holiday which ends this month.

The Halifax said prices rose by more than £22,000 to an average of £261,743.

But it said buyer preferences are shifting "in anticipation of new, post-pandemic lifestyles".

"There's greater demand for larger properties with more space," said Halifax managing director Russell Galley.

He said this was leading to "an increased willingness to spend a higher proportion of income on housing".

Halifax said annual house price inflation was at its strongest level in nearly seven years, with UK prices rising by 1.3% month-on-month.

"Cheap borrowing and affordability is giving buyers more purchase power, which is pushing up prices," said Mark Harris, chief executive of mortgage broker SPF Private Clients.

Annual house price growth was strongest in Wales, with values soaring by 11.9%, while the north west and Yorkshire and the Humber both posted double-digit growth.

But Mr Harris warned that rising property prices are not good news for first-time buyers, and will make getting on the housing ladder even more of a struggle.

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"For Wales and the north west, these are the biggest percentage gains since April 2005, and for Yorkshire and the Humber since June 2006," said Mr Galley.

"The south of England, traditionally the driving force of national house price performance, is for once lagging somewhat behind the rest of the country."

In Greater London prices are growing much more slowly than the rest of the country, up just 3.1% over the year.

Estate agent Mel John said times were tough for first time buyers

But London property prices were already extremely expensive, Mr Galley pointed out: "Having experienced a boom following the global financial crisis, a phenomenon not felt by many other UK regions and nations to anywhere near the same extent."

Unbridled demand

"This market is moving so fast that if you blink, it increases in value," said Nicky Stevenson, managing director at estate agent Fine & Country.

"It is incredible to watch when desire wrests control away from other factors during periods of exceptionally high demand like this and it could be about to get even busier."

She pointed out the market normally has a lull in the summer months "but now almost all foreign holidays appear to be off, there's nothing stopping the freight train that is unbridled demand from crashing straight through June, July and August".

Lucy Pendleton of estate agents James Pendleton agreed with that analysis. "The inability of Britons to go on holiday means there's no distraction now from executing that ambitious move to a larger home."