This is the highest level of house price growth in nearly seven years, according to the building society, which reported a monthly increase of 1.8%.

Although this compares to a 2.3% month-on-month rise in April, it means the average house price has reached a new record of £242,832. A typical UK property has therefore jumped in price by 23,930 over the past year.

Robert Gardner, Nationwide’s chief economist, said: “The market has seen a complete turnaround over the past twelve 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.”

Changing housing preferences

While the spike in transactions in March was driven by the stamp duty holiday, according to Gardner, the tax incentive was not the cause of May’s growth.

In fact, Nationwide’s survey of homeowners at the end of April suggested they would be moving home even if the stamp duty holiday had ended.

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

Nationwide’s research found, at the end of April, 25% of homeowners were either in the process of moving or considering a move as a result of the pandemic, only modestly below the 28% recorded in September last year.

“Given that only around 5% of the housing stock typically changes hands in a given year, it only requires a relatively small proportion of people to follow through on this to have a material impact,” Gardner added. “The ‘race for space’ continues…”

Of those moving or considering a move, around a third (33%) were looking to move to a different area, while nearly 30% were doing so to access a garden or outdoor space more easily, Nationwide found.

Negative equity

Miles Robinson, head of mortgages at online mortgage broker Trussle, considered the possibility the upcoming stamp duty holiday deadline was creating a false economy of bidding wars, with house prices inflating beyond their original value.

“This is putting buyers at risk of lenders down valuing during the mortgage process and even if applications are successful, homeowners could find themselves in negative equity later down the line,” he warned.