A busy summer ahead for the property market

House prices are still soaring, and the property market looks set to remain buoyant as we head into the summer period.

According to the Halifax House Price index, the average home in the UK now costs £261,743, reaching a record high.

This represents an increase in value by 1.3 per cent in the last month alone – and a 2.4 per cent rise since last quarter.

Russell Galley, managing director, Halifax, says: “House prices reached another record high in May, with the average property adding more than £3,000 to its value in the last month alone.

“A year on from the first easing of national lockdown restrictions, and the gradual reopening of the housing market, annual growth surged to 9.5 per cent, meaning the average UK home has increased in value by more than £22,000 over the past 12 months.

“Heading into the traditionally busy summer period, market activity continues to be boosted by the government’s stamp duty holiday, with prospective buyers racing to complete purchases in time to benefit from the maximum tax break ahead of June’s deadline, after which there will be a phased return to full rates.

For some homebuyers, lockdown restrictions have also resulted in an unexpected build-up of savings, which can now be deployed to fund bigger deposits for bigger properties, potentially pushing property prices even higher, he suggests.

“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 – as greater demand for larger properties with more space might warrant an increased willingness to spend a higher proportion of income on housing.

“These trends, coupled with growing confidence in a more rapid recovery in economic activity if restrictions continue to be eased, are likely to support house prices for some time to come, particularly given the continued shortage of properties for sale.”