UK house price inflation picks up as sales activity rebounds

(Sharecast News) - House price inflation picked up in May as activity increased following a dip the previous month, signalling a slight rebound in activity following a stamp duty-related slump in April, while rents continued to climb. According to data from the Office for National Statistics on Wednesday, the average house price was £269,000 in May, up 3.9% over the year before, with the growth rate rising from 3.6% in April.

The annual rate of house price inflation had slowed for the first time in 16 months in April, down from 7.0% in March, as housing activity slowed in response to changes in Stamp Duty Land Tax rules.

The changes, which increased the tax payable on properties valued above £125,000 (for non first-time buyers) from April onwards, resulted in unusually high sales volumes in March.

According to the ONS, average house prices in England increased 3.4% over the year to £290,000 in May, and were £210,000 in Wales (5.1%) and £192,000 in Scotland (6.4%).

"May was the busiest month for agreed property sales since 2022, as the market bounced back from a temporary lull post stamp duty increase," said Colleen Babcock, Rightmove's property expert, following the data.

"It's a price-sensitive market right now, with a decade-high number of homes for sale for buyers to choose from."

Meanwhile, the ONS reported that average rents across the UK were up 6.7% year-on-year at £1,344 in June, though the rate of growth eased slightly from 7.0% in May.

Rental inflation stood at 6.7% in England, 8.2% in Wales, 4.4% in Scotland and 7.6% in Northern Ireland.