UK House Price Growth Edges Higher to 3.5% in May

UK house prices saw a marginal increase in May with annual growth edging up to 3.5% from 3.4% in April, and a 0.5% rise month-on-month, reversing the previous month's decline that followed the end of the stamp duty holiday. The surge in transactions in March, driven by buyers rushing to complete purchases before the stamp duty changes, led to a temporary spike, but market activity has since stabilized with mortgage approvals indicating steady demand. Underlying factors such as low unemployment, healthy wage growth outpacing inflation, strong household balance sheets, and recent Bank of England interest rate cuts continue to support the housing market. While rural areas have experienced stronger price growth than urban regions over the past five years, regional variations and an urban-rural divide remain evident. Experts note that the recent dip in sales post-stamp duty holiday appears to be a short-term adjustment rather than a sustained downturn, with agent sentiment and increased listings suggesting ongoing market resilience. Overall, buyers and sellers are adapting to the new market conditions, balancing economic uncertainties with positive fundamentals that keep housing deals active.