In February, there was a 1.2% year-on-year growth in house prices, the first uptick since January 2023, with a 0.7% increase on a month-on-month basis
House prices in the UK are on the rise once again, marking the first increase in over a year, as indicated by a survey conducted by the UK’s largest mutually owned mortgage lender, the Nationwide building society.
In February, there was a 1.2% year-on-year growth in house prices, the first uptick since January 2023, with a 0.7% increase on a month-on-month basis.
The housing market experienced a slowdown in 2023, primarily due to the Bank of England’s efforts to combat rising inflation through 14 consecutive rate hikes, leading to interest rates peaking at 5.25% in August, the highest in 16 years.
It is anticipated that the next action by monetary policymakers will be a rate cut later this year. However, concerns about overestimation in financial markets have caused mortgage interest rates to rise in the past two weeks.
In comparison to the previous dataset showing a 0.2% decline year-on-year, February’s rebound has pushed the average UK house price to £260,420.
House prices are still approximately 3% below the peak levels witnessed in the summer of 2022.
And even after the increase in February, Nationwide’s chief economist, Robert Gardner pointed out that “industry data sources point to a noticeable increase in mortgage applications at the start of the year, while surveyors also reported a rise in new buyer enquiries.”
He also said: Industry data sources point to a noticeable rise in mortgage applications at the beginning of the year, while surveyors also reported an increase in new buyer enquiries.
The focus remains on the latest mortgage rate trends available to potential homebuyers.
Borrowing costs remain well below the highs logged last summer but, if the recent upward trend is sustained, it threatens to restrain the pace of any housing market recovery, said Gardner.
Nationwide recently increased its mortgage rates, following a similar move by competitors HSBC and Santander. These adjustments, averaging around 0.15% on standard fixed-rate five-year mortgages, have elevated rates to over 5.2% for a five-year fixed deal.
