House prices have shot up by almost 10% over the past year as more opt for bigger properties and gardens following lockdown.
The average house now costs £261,743 following an increase of more than £22,000 over the last 12 months, according to Halifax.
It said the 9.5% increase between May last year and May 2021 marked a record high.
This has pushed up the level of annual house price inflation to its strongest level in nearly seven years.
Over the past month alone, the average property has increased in value by more than £3,000 or 1.3%.
Halifax put the increase down to the stamp duty holiday and a shift in buyer preferences after spending months at home under lockdown restrictions.
Halifax said people’s preferences have changed ‘in anticipation of new, post-pandemic lifestyles’ with many willing to pay higher prices for properties with more space.
Managing Director Russell Galley said: ‘For some homebuyers, lockdown restrictions have also resulted in an unexpected build-up of savings, which can now be deployed to fund bigger deposits for bigger properties, potentially pushing property prices even higher.
‘Whilst these effects will be temporary, the current strength in house prices also points to a deeper and long-lasting change as buyer preferences shift in anticipation of new, post-pandemic lifestyles’.
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: ‘Cheap borrowing and affordability is giving buyers more purchase power, which is pushing up prices.’
All UK nations and regions, except the north east of England, had seen an acceleration in annual house price inflation in May, according to Halifax.
Wales saw the strongest increase with values soaring by 11.9%, while the north west and Yorkshire and Humber both saw double-digit growth marking their highest percentage gains since April 2005 and June 2006 respectively.
Mr Galley added: ‘The south of England, traditionally the driving force of national house price performance, is for once lagging somewhat behind the rest of the country.’
However, he warned that the price hike was not good news for first-time buyers and will make the already difficult task of getting on the property ladder even harder.
Halifax’s figures come after Nationwide last week found the price of a typical UK home had shot up by 10.9% in 12 months – the biggest annual increase since August 2014.
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