New builds bolster London

• Annual growth rates rise for first time in a year
• Every region records growth
• Monmouthshire up 13.9% and Cardiff up 9.5%, as buyers rush to beat tax hike
• Transactions down by 6% year-to-date

The UK housing market remained resilient showing a very slight rise in the annual house price rate in May (from 2.1% to 2.2%) following 11 months of falls. The positive performance in May means the market has narrowly avoided a full year of slowing house price growth. On a monthly basis prices were flat with no change on April.

The average house price in England and Wales is recorded at £305,654, up more than £6,000 on a year ago, when prices remained below the symbolic £300,000 mark. Transactions are down on the levels of last year, however, by 6% in the first five months compared to 2017.

Despite the lack of movement in prices, there is one big change in the market this month: London and the South East are no longer a brake on the market. Taking into account these two regions, there was a 2.2% annual price growth – taking them out of the equation, the growth rate is lower – at 2.1 %. It reverses the trend of most of last year.

This is partly due to a change in methodology, which better captures sales of new build properties. These tend to cost more than existing homes and have a particularly strong impact on the average price in London. The change also reflects a recovery in the capital which has strengthened after months of declines – even if transaction levels remain substantially lower than last year. London is showing average annual growth higher than five regions in the UK (including the South East) and equal to the West Midlands (2.9%), putting it mid-table in England and Wales in terms of growth.

This also means that every region in the UK now shows positive annual price growth for the last 12 months.

Click here to read the House Price Index – May 2018 (England and Wales)

Data source: LSL Property Services