House prices jumped 2.2% in the last year, official figures show, as they climbed for the third month in a row.

Data from the Office for National Statistics covering the 12 months up to May, show the average house price is now £285,000.

Previous figures revealed a smaller increase of 1.3% in the 12 months to April.

May’s findings represent the third consecutive month with an annual increase in prices following eight months of annual falls in prices.

Average private rents increased by 8.6% in the 12 months to June, which was down from 8.7% in the year to May, and below the record-high annual rise of 9.2% in March.

Industry reaction

Nathan Emerson CEO of Propertymark, says: “It is fantastic to see that the general election did not disrupt the housing sector greatly, and despite many challenges, the market still delivered growth.

“The rental sector urgently needs investment to keep pace with demand, and Propertymark is keen to see the UK Government closely review all elements and generate new legislation that promotes investment, but above all, provides full fairness to both landlords and tenants alike.”

Iain McKenzie, CEO of The Guild of Property Professionals, says: “Another solid month of growth in house prices is great news for sellers during the summer months, when footfall at estate agents is at its highest.

“Modest levels of annual growth in London and the South East are not surprising, considering prices have been overinflated in the region for many years,” he says.

“The political upheaval has settled, and the new government is getting its feet under the table.”

Emma Cox, MD of Real Estate at Shawbrook, says: “Despite a dip in house buying activity, house prices returned to growth in May.

“This, coupled with the likelihood of interest rate cuts this year and a recent spate of lenders lowering mortgage rates, should provide optimism for the remainder of the year.

“Professional landlords will be hoping for some post-election pricing consistency, and will also be keeping an eye out for any announcements from the new Government which may have an impact on the buy-to-let market.”

Sam Reynolds, CEO of Zero Deposit, says: “Much of the noise leading up to the election was predictably focussed on the housing market, however, with rents continuing to climb, it’s imperative our new Government gives the current rental crisis the focus it deserves.

“Today’s figures give a sense of the task ahead of the Labour government. We need more rental homes and ultimately, it is what they’ll be judged on as the single most important initiative to solve the demand-supply imbalance and the considerable rental cost inflation.”

Sara Palmer, Distribution Director at The Mortgage Lender, says: “A consistent increase in house price growth this year suggests a growth in consumer confidence as well.

“The recent cuts in mortgage rates by leading high street lenders provide a sense of security for prospective buyers, especially with rumours of a reduced interest rate by the Bank of England to come later this summer, helping to drive demand.”

Jean Jameson, Chief Sales Officer at Foxtons, says: “The sales market continues to recover from the lows we saw last year.

“New buyer activity has continued to grow in June – a 12% increase year-on-year – and has been largely matched with improved stock levels which are 10% higher than last year.

“Whilst the market is improving, buyers remain price-sensitive due to persistently elevated interest rates, meaning properties need to be competitively priced to sell.”

Read the full ONS bulletin here