Soaring demand for properties across the UK has seen house prices rise sharply over the past year. According to Nationwide, house prices have now reached their highest level in seven years, increasing 10.9% in the year to May.
The data shows the average house price has increased by £23,930 over the past 12 months, with many people racing to snap up homes with more space or gardens. This marks a massive change from just one year earlier when the property market slumped because of the impact of the Covid-19 pandemic.
A surge in activity
According to the Chief Economist from Nationwide, Robert Gardner, there has been a marked turnaround in activity over the past year. Mr Gardner said despite the slump experienced in the early part of last year, activity had surged during the latter part of the year, further fuelled by the stamp duty holiday.
Mr Gardener said, "The market has seen a complete turnaround over the past twelve months. But activity surged towards the end of last year and into 2021, reaching a record high of 183,000 in March." He added, "It is shifting housing preferences which are continuing to drive activity, with people reassessing their needs in the wake of the pandemic."
Many people appear to be keen to move to more spacious homes with attractive garden areas. This could be part of the impact of the pandemic, with many realizing how difficult it can be to be locked down at home with limited space and no garden.
This, along with the stamp duty holiday, appears to have had a substantial positive impact on the market, with people rushing to snap up homes and sellers enjoying steep increases in property values. Stamp duty was suspended on the first £500,000 of a property's value in a bid to help bolster the property market and was extended by the Chancellor as the pandemic continued.
While the stamp duty holiday was meant to end in March, it was extended in England, Wales, and Northern Ireland until 30th June.