Both the Halifax and Nationwide House Price Indices for May continue to show a booming UK housing market. Based on mortgage approval data, they show annual house price inflation at a seven-year high, with Nationwide recording a 10.9% growth rate and Halifax a slightly lower 9.5%. This takes the average house price to £242,832 and £261,743 as calculated by Nationwide and Halifax, respectively.

Compared to April, the Nationwide figures show a slight slow-down in the monthly price growth, falling from 2.3% to 1.8%. The Halifax records a minor fall of only 0.2%, moving from 1.5% to 1.3%. Both lenders comment on a modest drop in transaction levels after the spike in March caused by the originally planned end to the stamp duty holiday.

Both lenders comment on the continuing demand/supply imbalance. The Halifax note that demand for property continues to be strong but that stock levels have dropped in recent months and continue at a low level. Referring to figures released by the RICS, they report that the average estate agent has only 40 properties on their books. The Nationwide meanwhile notes that their research suggests that the stamp duty holiday is only affecting the timing of a house move, rather than being the driving force behind a decision to move. They predict that low levels of stock will continue to have an upward pressure on annual house price growth.

The continuing shift in housing priorities is commented on by both lenders. According to a survey carried out by Nationwide in late April, nearly a third of home movers were doing so in order to improve access to a garden or other outdoor space. Over 20% were looking to move to a quieter, less urban environment, although unsurprisingly this trend was more pronounced among older age-groups. The Halifax predict that a willingness to spend more money on housing in order to gain space, both indoors and out, may become a permanent change to post-pandemic lifestyles.
There are interesting comparisons to be made between Q1 2021 and Q1 2020 in our area. The Milton Keynes area saw an average sales price in Q1 this year of £362,000 compared to £309,000 in Q1 last year, showing a year-on-year change of 17.2%. However, this change may partly be down to fewer smaller properties being sold in the later period.

In the near future, both Nationwide and Halifax predict that the market will remain buoyant due to growing confidence in economic recovery. They anticipate that the combination of increased savings, low interest rates and the ongoing shortage of housing for sale will probably result in a further acceleration in annual house price growth over the next six months.

If you’re looking to make you next move, please get in touch today on 01908 373580 ☎️