UK House Price Index - Average House Prices Increased By 12.8%

20th July 2022

UK average house prices increased by 12.8% over the year to May 2022, up from 11.9% in April 2022.

The average UK house price was £283,000 in May 2022, which is £32,000 higher than this time last year.

Average house prices increased over the year in England to £302,000 (13.1%), in Wales to £212,000 (14.4%), in Scotland to £188,000 (11.2%) and in Northern Ireland to £165,000 (10.4%).

London continues to be the region with the lowest annual growth at 8.2%.

The latter half of 2020 saw the UK's average house price growth accelerating. This trend continued into 2021, and house price growth has remained strong since the start of 2022; the UK average house price for May 2022 was £283,000, up from £280,000 in April 2022.

On 8 July 2020, changes to the tax paid on property purchases were announced with immediate effect in England and Northern Ireland. Similar changes came into effect slightly later in Scotland and Wales (15 July and 27 July, respectively). In England and Northern Ireland, properties up to the value of £500,000 would incur no tax, while the thresholds for Scotland and Wales were £250,000. These changes in the tax paid on housing transactions may have allowed sellers to request higher prices as the buyers' overall costs were reduced.

On 3 March 2021, an extension to the Stamp Duty holiday in England and Northern Ireland was announced. This meant that the tax holiday was extended until 30 June 2021, after which the threshold decreased to £250,000 until 30 September 2021. From 1 October 2021, the Stamp Duty thresholds have reverted to what they were before 8 July 2020. The tax holiday for Scotland ended on 31 March 2021. The tax holiday for Wales ended on 30 June 2021.

As the tax breaks were originally due to conclude at the end of March 2021, it is likely that March's average house prices were slightly inflated as buyers rushed to ensure their house purchases were scheduled to complete ahead of this deadline. This effect was then further exaggerated in June 2021 in line with the extension to the holiday on taxes paid on property purchases in England, Wales and Northern Ireland. This could be seen again in September 2021 when the last of the tax holidays came to an end in England. An increase in prices since then has resulted in a record average house price level in the UK of £283,000 in May 2022. This is the seventh consecutive month that average UK house prices have increased. While the annual growth rate of 12.8% in May 2022 is the highest since June 2021, it is worth noting that this may be somewhat attributable to the slow growth experienced in early 2021, as well as the strength seen across recent months.

The provisional seasonally adjusted estimate of UK residential transactions in May 2022 was 109,210, as shown in the Monthly property transactions statistics published by HM Revenue and Customs (HMRC). This is 5.1% lower than May 2021 and 1.3% higher than April 2022.

To read the full report go HERE