House prices up in May, says Land Registry
House prices went up by 8.1% annually in May, taking the average UK property value to £211,230, according to the latest research.
Prices went up by 1.1% over the month in the UK as a whole, which means house buyers paid £2,400 more in May than they would have done in April.
The Land Registry’s UK House Price Index for May – which is its last pre-Brexit analysis – also reveals that England outperformed the rest of the UK with an 8.9% rise in house prices and an average price of £226,807. However, prices went up by 1% over the month, compared with 1.1% over the UK as a whole.
In Northern Ireland prices rose by 5.9% annually to £117,524, but they fell by 1% on a monthly basis.
In Scotland house prices went up by 4% over the year and by 2.8% month-on-month, with an average price of £141,142.
Wales saw annual house prices rise by 3.6% and monthly prices by 0.9%, with the average house price at £142,568.
There were double-digit annual house price rises in London at 13.6%, putting the average property value at £472,163. Between April and May 2016, house prices in the capital went up by 1.5%. The South East also performed well, with annual property price rises of 12.9% and an average price of £306,037.
Mixed message in the North
One surprise was how well house prices in the North East performed between April and May, with an increase of 2.1% – outperforming prices in London and the rest of the UK on a monthly basis. However, over the year, the region only saw a 3.2% rise in house prices.
In contrast, the North West saw the biggest monthly price fall with a movement of -0.3%, though house prices were up by 4.3% over the year.
Following a strong increase in sales in March 2016 prior to the stamp duty changes, sales of homes in the UK dropped by 42.3% in April 2016 to their lowest level since May 2013. In May, these recovered slightly by 1.3%.
First-time buyers paid 1.2% more for their homes in May than they did in April, with the average price at £178,923.
Data doesn’t reflect post-Brexit housing market
Russell Quirk, founder and chief executive of eMoov.co.uk, says: “In terms of sales volume, the market has certainly levelled out since the artificial spike of April’s stamp duty deadline.
Although there has only been a slight recovery, this is to be expected and will probably take a month or two more, before it returns to a level we might expect for this time of year.”
Jonathan Hopper, managing director of buying agent Garrington Property Finders, adds: “Reassuringly rosy though it is, this official house price data offers scant insight into what's going on in today's property market.
“The vote for Brexit plunged the market into a ‘hard reset’ in which both buyers and sellers took a step back and considered their positions.
“Many buyers have become very cautious and are asking for big price reductions – and vendors who have to sell are starting to offer discounts, often big ones.
“While the dust has yet to settle and it’s too soon to gauge how much prices have fallen, some sellers are already behaving as if a fall is coming.”
A hugely unpopular tax paid on property and share purchases. Stamp duty on property is levied at 1% for purchases over £125,000 (£250,000 for first-time buyers) which then moves up at a tiered rate. For property between £125k and £250k you pay 1%, then 3% from £250k up to £500k and then 4% from £500k to £1m and then 5% for properties over £1m. But unlike income tax, which is “tiered” and different rates kick in at different levels, stamp duty is a “slab” tax where you pay the rate on the whole purchase price of the property. On shares, stamp duty is charged at a flat rate of 0.5% on all share purchases. Figures correct as of May 2011.