In February, UK house prices surpassed expectations by rising more than anticipated, marking their first annual increase in over a year, as reported by lender Nationwide. This growth adds to signs of a market rebound, supported by eased mortgage rates.
Compared to February of the previous year, the average house price saw a 1.2% increase, following a slight 0.2% decline in January. Economists surveyed by Reuters had projected a month-on-month increase of 0.3% and an annual increase of 0.7%.
Prices rose 0.7 per cent from January, taking the average property price to £260,420.
Robert Gardner, Nationwide’s chief economist, said: “The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market.”
The data contributes to mounting evidence indicating a recovery in the property market, which had been constrained by elevated borrowing costs affecting homebuyers throughout the previous year. According to the Bank of England, mortgage approvals surged beyond expectations in January, reaching the highest level since October 2022. Additionally, BoE data revealed a continued decline in mortgage rates from their peak levels in the summer of 2023.