Although there was a small monthly drop, house prices in England and Wales rose slightly over the 12 months to May, up by 0.3% to an average of £300,866. Transactions were up by 7% on April and by 0.6% year on year, and the number of mortgage approvals for purchases and re-mortgaging also went up.


Going up: Wales, the Midlands and the North West

Cooling down: London, the East and the South East

Broadly speaking, it’s the traditionally higher-priced areas that have suffered most over the last year, while values have risen in more affordable locations. This is the continuation of a long-term adjustment to ‘over-inflation’ of prices in certain places.

Wales tops the table, with prices up 3.1% over the year to April. Areas that have done especially well:

Marthyr Tydfil+7.2%
Blaenau Gwent+6.4%

In England, five counties and local authority areas with excellent annual and monthly increases also hit new peaks:

 MonthlyAnnualAverage price
Bracknell Forest+0.7%+7%£418,919
City of Bristol+1.1%+5.5%£318,053


It’s still the case that around two-thirds of the total number of boroughs are seeing annual falls. However, the average price in London as a whole rose over the first four months of the year and the more expensive boroughs seem to be recovering slightly.

Foreign buyers are returning to the capital, thanks to a favourable exchange rate and reduced prices, signalling that London is still seen as a good long-term investment.

Rents: England & Wales

The rental market as a whole remains stable, with

Eight of the ten regions have seen annual increases, indicting a stable rental market. Leading the way:

  • West Midlands +4.1%
  • South West + 2.8%

Although London posted annual falls, there was strong growth between April and May, so the capital may have turned a corner.

The average rent in England and Wales is £863 (seasonally adjusted), that’s up 0.2% for both the month and the year.

The average yield is 4.3%, however the significant difference between the top and the bottom continues, with landlords in the North East seeing returns of 5%, and those in London getting just 3.2%, due to the wildly different level of house prices.

Arrears have fallen consistently since February, indicating a continuing improvement in tenants’ finances. In May, 8.9% of all tenancies were in arrears, down 0.5% on the previous quarter.

Prices and Rents: Scotland

Data for April shows that while Scotland as a whole is continuing to outperform England & Wales, with prices up 0.7% on an annual basis, the top end of the market is dropping back. Half of the top ten most expensive local authority areas have seen annual price falls, notably:

 Month changeAnnual change
East Renfrewshire-1.2%-10.6%
City of Edinburgh-2.1%-3.9%

It’s interesting to note that Glasgow sits at the top of the scale for monthly price changes and number of sales, accounting for 25% of the average increase in prices, while Edinburgh is at the bottom, accounting for 52% of the total fall in prices.

The main reason for this huge difference between Scotland’s top two cities seems simply to be affordability – as in England & Wales – illustrated by the difference in price of the most frequently-traded properties:

Average price of a flat£229,000


Average price of a terrace£292,000£170,000

On an annual basis, prices have grown in 21 of the country’s 32 areas, with 5 hitting new peak prices. Doing particularly well:

 Month ChangeAnnual changeAverage price
East Lothian+4.1%+13.3%£262,135
Orkney Islands+3.4%+7.4%£153,495
Perth & Kinross+0.2%+7.2%£207,997
Angus+3.1%+6.4%£175,537 – new peak
Midlothian+1.1%+6.2%£237,394 – new peak
Moray+3.1%+5.7%£175,000 – new peak

And, according to the RICS market survey for May, demand is likely to exceed supply price growth in Scotland over the next 12 months, meaning prices will continue to rise.

Rental market

The Highlands and Islands remains the most expensive region, at £692pcm. Prices there have risen by 3.8% in the last year and by 0.6% between April and May. On a monthly basis, Glasgow and Clyde topped the regions, with rents up by 1.9%. Across Scotland as a whole, rents were up by 1.7% in the year to May and now stand at £582pcm (seasonally adjusted).

And landlords are still seeing good returns in Scotland. Yields rose in March for the first time in two years and have stayed at 4.7% for the past three months, with only the North of England performing better.

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