By David Milliken
LONDON (Reuters) – UK house prices in May were 9.5% higher than a year earlier, their biggest annual increase since June 2014, adding to signs of a housing market boom, showed on Monday numbers from the Halifax mortgage lender.
The UK housing market has seen a sharp increase in sales and prices over the past year, thanks to a government tax incentive for movers and an increase in demand for more spacious properties from wealthier households able to work from home.
“As the traditionally busy summer approaches, market activity continues to be boosted by the government stamp duty holiday, with potential buyers rushing to complete their purchases in time to qualify for the tax break. maximum before the June deadline, ”said Halifax CEO Russell Galley. .
House prices in May were 1.3% higher than in April, when they rose 1.5%. Economists polled by Reuters on average expected a monthly increase of 1.2% and an annual increase of 10.0%.
Other house price measures have also shown strong increases. The UK’s official house price index showed house prices based on deals concluded in March to be 10.2% higher than a year earlier, the biggest increase since August 2007.
Halifax said it expects the upward pressure on house prices to outlast the stamp duty cut, which will be phased out between July and October.
“The current strength in house prices also indicates a more profound and lasting change as buyer preferences shift in anticipation of new post-pandemic lifestyles,” said Galley.
“An increased demand for larger properties with more space could justify an increased willingness to spend a higher proportion of income on housing,” he added.
(Reporting by David Milliken; editing by Michael Holden / Guy Faulconridge)