Annual UK house price growth edged higher in May to 3.5%, up from 3.4% in April, according to a census performed by Nationwide.

House prices in predominantly rural areas have risen by 23% over the last five years, compared with 18% in more urban areas.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “Official data confirmed that there was a significant jump in residential property transactions in March, with buyers bringing forward their purchases to avoid additional Stamp Duty costs. Owner occupier house purchase completions were around twice as high as usual and the highest since June 2021 (which was also impacted by Stamp Duty changes).”

He added that despite the Stamp Duty changes, and market uncertainties, market activity appears to be holding up well with the underlying conditions for potential home buyers in the UK remaining supportive. “Unemployment remains low, earnings are rising at a healthy pace (even after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we, and most other analysts, expect.”

Robert also said that the price of countryside homes is ploughing ahead of urban properties. “Our recent special report identified that average house price growth in predominantly rural locations has continued to outpace more urban areas.  Between December 2019 and December 2024, house prices in predominantly rural areas increased by 23%, compared with 18% in areas that are largely urban.”

“In our latest housing market survey, we focussed on homeowners who have moved in the last five years. Our findings indicate that the majority (63%) of house moves were within the same type of area, with the biggest flow being within large towns or cities (as shown in the diagram above). Around 9% of moves were from towns/cities to rural areas (villages or hamlets), although this was partially offset by 7% who moved from rural to more urban areas.

Robert said that amongst those who moved to a different type of area, there was a significant difference by age group, with younger people (those aged 25-34) tending to move to more urban areas, and older age groups, particularly 55+, favouring more rural areas).

Jonathan Handford, Managing Director at national estate agent groupFine & Country, said affordability remains a key challenge, especially for first-time buyers. “Rising prices, higher deposits, and tougher lending conditions continue to keep many people on the sidelines,” he said. “To truly boost demand, more support is needed, such as help for first-time buyers, tax breaks, or new schemes to make ownership more accessible.”

Daniel Austin, CEO and Co-founder at ASK Partners, said: “Despite a rise, we believe that growth is likely to face pressure and remain steady, as higher borrowing costs start to affect buyers, despite the market's continued resilience. Investors and developers in the residential sector remain motivated by the supply demand imbalance and under the Labour government, we think there will be more projects that get off the ground. We are seeing a greater variety of housing options, such as co-living schemes, coming to market which fulfil the growing requirements of younger professional buyers. If prices flatten and interest rates start to fall, we will see more first-time buyers able to step onto the property ladder.”

Image: Homeowners who moved to a more/less urban area by age.