The average cost of a home in the UK rose 10.9 per cent — the fastest rate in almost seven years — to hit £242,832 over the year to May in a post lockdown “race for space,” according to data from Nationwide.
Prices rose 1.8 per cent during the month itself, following a 2.3 per cent rise in April.
Analysis by Nationwide revealed that a third of those looking to move want to relocate to a different area — typically somewhere more leafy — while almost 30 per cent wanted a garden or easier access to outdoor space.
Mark Dyason, of UK-wide home loan broker Edinburgh Mortgage Advice, said: “Demand and supply have never been as out of sync. The result is fevered bidding in the most sought-after areas, with sealed bids the norm. Flats that have been behind the market in recent months are catching up as the inner cities start to reopen, hopefully in earnest.”
Anna Clare Harper, chief executive of property consultancy SPI Capital, said: “A big cause of current house price growth is the desire for more space — and for those not moving, home renovations are on the up. This is symbolic of our rising living standards — a good thing. It is also causing inflation in the construction sector, which has profound social consequences.
“Inflation means the cost of renting, buying and improving homes are likely to continue to rise. This will continue to create widening inequalities between the ‘haves’ and the ‘have-nots’. In short, it is bad news for younger and less well-off people as it will disproportionately, but not exclusively, affect them.”
Tom Bill, head of UK residential research at Knight Frank, said: “More supply is starting to come online, which will redress the balance. We therefore expect UK house price growth will slow down after the summer, declining to 5 per cent by the end of 2021.”