UK house prices rose by 0.7 per cent in February, says the Nationwide, after taking account of seasonal effects. 

This resulted in an improvement in the annual rate of house price growth to 1.2 per cent in February, from a fall of 0.2 per cent the previous month. 

House prices are now around 3.0 per cent below the all-time highs recorded in the summer of 2022.

Nationwide chief economist Robert Gardner says: “The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market. 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.

“Nevertheless, near-term prospects remain highly uncertain, in part due to ongoing uncertainty about the future path of interest rates.  

“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.

“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.”

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, says: “There tends to be an over-concentration on property prices when it comes to assessing how the housing market is performing. Prices impact buyer and seller confidence but transactions and affordability, which is most stretched in higher-value areas such as London, are arguably more relevant.

“In our offices, more valuations, listings and viewings combined with fewer fall-throughs than this time last year are feeding through to agreed sales, mortgage approvals and exchanges.

“However, while Nationwide reports another rise in prices, the market does remain price sensitive. Only competitively-priced properties are attracting attention. Sellers must price realistically or offers won’t be forthcoming and market improvement may not be sustained.”