House prices are increasing at a staggering annual rate of up to 20.9% in the North West, driven by a high demand for semi-detached homes, according to the latest data released by e.surv.
According to this morning's figures, the average price of a home in England and Wales stood at £343,658 in May - up 0.5% on the month and 13.4% on the year, the highest year-on-year growth since December 2004, and despite England and Wales having been in various states of lockdown and economic contraction since March 2020.
During April, the North West continued to lead the way as the region with the highest rate of annual house price growth, at 18.4%. The North West’s prominence has been enabled by both Greater Manchester and Merseyside, where prices in the two areas are increasing at a worrying annual rate of 20.9%. It is the price of semi-detached homes that have seen the largest increase in these two conurbations, with prices up by some 24% in Greater Manchester and 19% in Merseyside.
From August 2020, the price of detached properties rose at a faster rate than that of semi-detached and terraced homes, at least until March 2021, when the growth in detached homes showed a minor slowing in its rate of price appreciation.
Richard Sexton, director at e.surv, comments: “Overall, we can see the market continues to enjoy the effect of the government’s stamp duty holiday. Buyers are still striving to complete purchases in time to benefit from the maximum tax break ahead of the change in June to a tapered deadline.
“Completion prices for transactions funded by both mortgages and cash grew by a startling 13.4% annually in May, and at a national level, prices in England and Wales rose on a monthly basis by some £1,800, or 0.5%. However, it is notable that the monthly price increases over the last three months are the lowest since June 2020, probably a reflection of the rapidly approaching end of the stamp duty holiday.
“Regionally, there has been continued price growth across Wales and all nine English regions. Prices performed particularly strongly in the North West which achieved its highest rate of annual house price growth,18.4%. Growth in the North West is underpinned by activity in both Greater Manchester and Merseyside, where prices are increasing at a staggering annual rate of 20.9%. London and the South East have also seen growth, although at a lower level. It should be remembered that London property prices have already experienced a boom in the years following the global financial crisis, a rise not experienced by many other UK regions.
“Our property type data shows there has been a shift in the kind of homes that buyers are looking for. Working from home has encouraged interest in larger homes with gardens outside city centres. The demand for flats in central and inner areas of London and other cities has not been as strong as for other types of homes due to lifestyle changes and new working arrangements, alongside the absence of overseas buyers in prime central London due to Covid restrictions. The impact of the pandemic on flats has been amplified by the issues surrounding cladding for mortgage lenders.”