New figures from Nationwide show that annual house price growth jumped to 10.9% in May.
The housing boom continues and has increased from 7.1% a year in April. The drive in demand has been pushed by the race for space and stamp duty holiday.
Robert Gardner, Nationwide’s chief economist, said: “Amongst homeowners 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,” he added.
“Over a third (36%) of those surveyed said they were more likely to consider enhancing their home as a result of Covid19, with nearly half (46%) of these looking to add or maximise space.”
The prices of larger and rural houses are being pushed up, according to Nicky Stevenson, the managing director at national estate agent group Fine & Country. He said: “Many current buyers are those who delayed a move last year and would have been forgiven for thinking that competition would have cooled by now.
“Instead, they find themselves in an even tighter race as demand continues to outstrip supply. The buyers driving the market higher are still those looking for more space. Forever homes are still the order of the day and buyers are more than willing to do everything in their power to secure what they truly desire.
“There just aren’t enough of these larger properties coming onto the market in the right areas and there’s no sign this imbalance is going to resolve itself in time to suppress strong growth over the summer.”
