House price annual inflation was 5.8% in England, 2.5% in Wales, 2.9% in Scotland and 10.5% in Northern Ireland.
The pace of annual house price growth increased slightly across the majority of the UK in May 2015. Annual house price increases in England were driven by an annual increase in the East (9.3%) and the South East (8.2%).
Excluding London and the South East, UK house prices increased by 5.2% in the 12 months to May 2015.
On a seasonally adjusted basis, average house prices increased by 0.9% between April and May 2015.
In May 2015, prices paid by first-time buyers were 5.1% higher on average than in May 2014. For owner-occupiers (existing owners), prices increased by 5.9% for the same period.
Stephen Smith, Director, Legal & General Mortgage Club and Housing, commented:
“Ensuring that there’s a balance between supply and demand is key to the health of the UK housing market. The current level of supply is failing to keep up with demand, which is pushing up house price inflation. This trend is likely to worsen in the remainder of the year as strong market conditions, driven by low inflation, low interest rates and rising wages, will generate an even greater surplus in demand.
It’s great to see that the Government recognises that there’s a lack of supply, as shown by its recent proposals aimed at increasing the efficiency of the planning system. That said, this measure shouldn’t be exclusively relied upon to act as a housebuilding catalyst. More needs to be done across the sector to stimulate activity and ensure that there are enough new homes in production to keep up with demand.”
Ben Thompson, Managing Director, estateagent4me.co.uk, added:
“Although house prices have risen over the past month, it is important to look beyond the national picture. The regional story can be very different to the national one, as well as varying hugely across areas of the UK. It is short sighted to think we can get a sense of how the market as a whole is performing from just one headline statistic.
“London is often cited as the region where house prices are most inflated. However, other hotbeds are forming across the UK where house prices are creeping above the national average. Asking prices in Reading for example have hit an average of £289,475 - almost £65,000 more than the average price for England. House price growth needs to be broadly consistent across the country if we are to maintain a stable market. If some areas race above others in terms of price then we are at risk of seeing a two speed market develop. The key way to ensure property remains affordable is to ramp up housing supply across these key areas. We need to see the government and the industry work together to boost construction and deliver on the promise of more homes.”
