Despite persistent economic uncertainty, the UK housing market showed surprising strength in May, with house prices edging up both monthly and annually, according to new data from Nationwide. The average UK house price climbed to £273,427 (€324,232.5), up from £270,752 (€321,053.7) in April — a 0.5% month-on-month increase that significantly beat the 0.1% gain analysts had predicted.
Annual price growth also accelerated slightly to 3.5%, up from 3.4% in April, outpacing expectations of 2.9%. These figures point to a housing market that continues to display resilience in the face of several headwinds — from the after-effects of stamp duty threshold reductions to inflationary pressures and the looming possibility of higher costs due to global tariff adjustments.
“Owner occupier house purchase completions were around twice as high as usual and the highest since June 2021,” noted Nationwide’s chief economist Robert Gardner. He attributed the spike in transactions to buyers rushing to complete purchases ahead of stamp duty changes earlier in the year, adding that mortgage approval data indicates sustained demand and robust underlying market conditions.
While many buyers are pressing forward, some are rethinking their next steps. Alice Haine, a personal finance analyst at Bestinvest by Evelyn Partners, commented: “While some buyers are clearly pushing ahead with their purchase journey, others may now be mulling their options more carefully as higher costs pose a fresh challenge.” She emphasized that first-time buyers are particularly impacted, now having to factor in larger stamp duty costs alongside already demanding deposit requirements.
The shifting landscape has led to some financial institutions loosening their criteria, with growing discussions around 100% mortgage products — a move aimed at assisting first-time buyers in gaining a foothold on the property ladder. The Bank of England’s recent monetary policy easing, while offering relief through marginally lower borrowing costs, continues to be offset by stubbornly high inflation and broader economic volatility.
Haine also pointed to seasonal advantages for buyers:
“The traditional surge in listings at this time of year is a positive buyers can take advantage of, as a wider stock of homes to choose from raises the potential for heavier negotiation on price”
Rural areas, in particular, have continued to outperform urban ones in terms of price growth. A special Nationwide report highlighted that house prices in rural locations rose 23% between December 2019 and December 2024, compared to 18% in urban areas. “The pandemic had a significant impact on housing demand during 2021 and 2022, with a shift in preferences towards more rural areas, particularly amongst older age groups,” said Gardner. While this trend has somewhat softened, non-urban areas remain ahead in long-term growth.
Demographic patterns also reflect this rural-urban divide. Among homeowners who moved in the past five years, most stayed within the same type of area, but 9% transitioned from cities to villages or hamlets — a movement driven largely by those aged 55 and older. Younger buyers, especially those between 25 and 34, still tend to favor city living.
With resilience holding firm and some segments of the market continuing to evolve in response to changing economic and social dynamics, the UK housing market in May sent a clear message: for now, it remains surprisingly steady, even in the face of continued global headwinds.
