House prices rise by 11% in record month as Sheffield leads property boom

House price rises hit 11% in May as Sheffield’s property market continued to boom in a record month.

The price growth in May was the highest for almost seven years and one Sheffield estate agent said the market was ‘incredibly busy’ – fuelled by a lack of stock.

Nicola Spencer, managing director at Spencer estate agents, spoke after the Nationwide House Price Index showed prices went up 1.8% month-on-month in May, following a 2.3% rise in April.

It means annual house price growth has risen to 10.9% - the highest level in nearly seven years - and a new-build development in Walkley, Sheffield, shows this.

Sold and for sale signs as house prices increase again

Nicola said Lark’s View on Lark Street had five detached and six terraced houses with a top price of £310,000. “We were getting 16 offers per house and that resulted in sales of at least 10% over the asking price, a couple for more.

"What we are seeing is a massive shortage of available stock which is fuelling what people are prepared to pay so prices are going up. It is great if you’re selling, but not if you are buying.”

She added people bidding from London and the demand for office space in a home was adding to fuelling already red-hot market.

"The spike is demand is due to the circumstances as we come out of the pandemic.

"There’s a demand for home offices, people are moving here from London, it is like a perfect storm.

"We get multiple bids on every property. The market keeps rising, it is almost like panic buying. I’d call for people to calm down.”

Nationwide's Chief Economist Commenting Robert Gardner said: “The market has seen a complete turnaround over the past 12 months.

"A year ago, activity collapsed in the wake of the first lockdown with housing transactions falling to a record low of 42,000 in April 2020. But activity surged towards the end of last year and into 2021, reaching a record high of 183,000 in March.

“While March’s spike in transactions was driven by the original end date of the stamp duty holiday, a lot of momentum has been maintained. Our research indicates that the extension to the stamp duty holiday is not the key factor, though it is clearly impacting the timing of transactions.

“Amongst homeowners surveyed at the end of April that were either moving home or considering a move, more than two thirds said this would have been the case even if the stamp duty holiday had not been extended.

"It is shifting housing preferences which is continuing to drive activity, with people reassessing their needs in the wake of the pandemic.

Sam Mitchell, CEO of online estate agent Strike, said: “Many will be questioning if this level of demand will last once the stamp duty holiday begins to taper off, but let’s not forget that the UK is still faced with a major supply and demand imbalance issue.

"A lack of new stock, particularly houses with outside space and in rural locations, will continue to push prices up by being outweighed by demand.”