The Office for National Statistics (ONS) house price index revealed that on a monthly basis, average house prices were 1.1% higher.
The largest annual increase was in Northern Ireland, where house prices rose 9.5% to £185,037 over the year to Q1.
This was followed by Scotland, with a 6.4% uplift to £191,927, and Wales, where prices increased by 5.1% to £209,580.
The smallest yearly change was recorded in England, with a 3.4% uptick to £290,000.
On a monthly basis, however, England saw the largest increase at 1.3%, then Northern Ireland at 1%. There was muted monthly growth in Wales, with just a 0.5% rise in prices, while house price growth was flat in Scotland.
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London was the only region in England to see a monthly dip in house prices, falling by 1.4% to £565,637. Annually, house prices were 2.2% higher.
The North East had the strongest monthly and annual house price growth of all English regions, averaging £159,142 in May, representing a monthly increase of 2.2% and a yearly rise of 6.3%.
Detached property values rise
The average price of a detached home was £441,439 in May, 5.4% up since the year before and the biggest increase compared to other property types.
There was a 4.6% monthly rise in the average price of a semi-detached home, at £270,550, while terraced homes were 3.6% higher in value at £223,539.
A growth of 1.5% was recorded for flats and maisonettes, averaging £198,262.
First-time buyers paid £226,673 for their homes on average in May, a 1.3% monthly rise and a 3.6% yearly jump.
For former owner-occupiers, the average house price was £331,397, up 0.9% monthly and 4.1% yearly.
A readjusting market
Noting that house prices had recovered from the dip in April, and annual growth was still below the two-year high seen in March, industry figures said the market was going through a period of adjustment.
Chris Storey, chief commercial officer at Atom Bank, said: “The impact of the end of the stamp duty holiday is clear to see – while house prices continue to rise on an annual basis.
“Further house price growth threatens to make life hard for those who have been unable to save a sizeable deposit. Questions remain over the effectiveness of measures like the Lifetime ISA, so the onus is on lenders to deliver flexible, common-sense lending [that] keeps housing accessible. The changes to the high loan-to-income limits confirmed in yesterday’s Leeds Reforms, as well as the introduction of a permanent mortgage guarantee scheme, should make that easier for lenders to do – it’s now all a question of attitude.”
Nick Leeming, chair of Jackson-Stops, said: “The market is readjusting following an accelerated start to spring and a shift in buyer sentiment, as broader economic factors take hold during a typically quieter seasonal period for the market.
“Ultimately, good property priced correctly will sell – but in the current climate, it’s more important than ever for sellers to listen to agent advice on pricing. Many vendors now entering the market bought in very different conditions and may need to adjust their expectations. While there is a healthy level of stock, the market would benefit from more active buyers.
“Looking ahead, the expectation is that activity remains steady into the mid-year market. The market still has a strong contingent of committed lifestyle buyers, which is being supported by the ‘must movers’.”
Darrell Walker, group sales director at Chetwood Bank for ModaMortgages and CHL Mortgages for Intermediaries, said: “Another month of annual house price growth – and a return to monthly growth – underlines the resilience in the market, but it comes with a caveat. The figures show that while prices are edging upwards, momentum has slowed notably since March’s two-year high. It’s a reminder that although market sentiment remains broadly positive, it is still somewhat fragile.
“Much of this reflects how buyers and investors have become more selective, seeking opportunities that balance short-term value with long-term potential. It’s a clear sign that we’re still in a buyer’s market, shaped by elevated borrowing costs and ongoing uncertainty around the Bank of England’s next move.
“But not all buyers are sitting tight and waiting for the base rate to fall. The latest data demonstrates that prices are rising, and that’s because demand is still there, so the lending market must continue to step up. Bespoke, flexible solutions will be essential in helping brokers and their clients capitalise on emerging opportunities. By doing so, lenders can help the market move forward with confidence, regardless of what the Bank of England’s next decision may be.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: House prices jump 3.9% YOY to £269k in May – ONS
