UK house prices grew for year-on-year for he first time since last January, according to Nationwide’s latest report, as green shoots emerge in the property market.
The cost of a property increased 1.2 per cent year-on-year. This is against a 0.2 per cent decline recorded in January. On a monthly basis, house prices increased 0.7 in February.
Across Britain today the average price of a home has risen by around three thousand pounds to £260k.
Robert Gardner, Nationwide’s chief economist, said: “House prices are now around three per cent below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.
“The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market.”
He added: “Indeed, 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.”
Towards the end of last year, home loan prices slumped as dozens of UK lenders offered better deals to battle for business.
However, the trend has reversed in recent weeks as high rate expectations have driven up swap rates, which lenders use to price their mortgage deals.
Gardner warned ongoing uncertainty about the future path of interest rates could hinder recovery in the market
He said: “After falling sharply in late December, swap rates, which underpin fixed rate mortgage pricing, have drifted back up.”
“Borrowing costs remain well below the highs recorded last summer but, if the recent upward trend is sustained, it threatens to restrain the pace of any housing market recovery.
He added: “While the squeeze on household budgets is easing, with wage growth now outstripping inflation by a healthy margin, it will take time to make up for the ground lost over the past few years, especially given consumer confidence remains fragile.”