UK house prices jumped 10.9 per cent on average in May

House prices jumped by 10.9% annually in May, marking the strongest growth seen in seven years.

The soaring prices were followed a 7.1% annual increase recorded in April, Nationwide Building Society said.

Across the UK, property values hit a new record average of £242,832 – up by £23,930 compared with 12 months earlier.

The figures have prompted discussion among housing experts as to whether the boom will soon be followed by a bust.

Robert Gardner, Nationwide’s chief economist, said: “The market has seen a complete turnaround over the past 12 months.

“A year ago, activity collapsed in the wake of the first lockdown, with housing transactions falling to a record low of 42,000 in April 2020.

“But activity surged towards the end of last year and into 2021, reaching a record high of 183,000 in March.”

He said that the stamp duty holiday had helped the spike in sales.

He added: “A lot of momentum has been maintained. Our research indicates the extension to the stamp duty holiday is not the key factor, though it is clearly impacting the timing of transactions.

“Amongst home owners surveyed at the end of April that were either moving home or considering a move, more than two-thirds (68%) said this would have been the case even if the stamp duty holiday had not been extended.

“It is shifting housing preferences which is continuing to drive activity, with people reassessing their needs in the wake of the pandemic.

“At the end of April, 25% of home owners surveyed said they were either in the process of moving or considering a move as a result of the pandemic, only modestly below the 28% recorded in September last year.

“Given that only around 5% of the housing stock typically changes hands in a given year, it only requires a relatively small proportion of people to follow through on this to have a material impact.”

Of those moving or considering a move, a third (33%) were looking to move to a different area while nearly 30% were doing so to access a garden or outdoor space more easily.

More than a third (36%) said they were more likely to consider enhancing their home as a result of Covid-19, with nearly half (46%) of these looking to add or maximise space.

Additional reporting by PA.