House prices rise as mortgage costs fall – Nationwide

Annual UK house prices rose for the first time in more than a year this February, according to the building society Nationwide.

The average price of a home rose by 0.7%, month-on-month and 1.2% compared with a year ago, the research found – the first annual growth since January 2023.

However, house prices are 3% lower than summer 2022, when demand for properties peaked.

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

Mortgage rates reached a 15-year high of 6.66% in July last year but have since fallen, with a ‘mortgage price war’ bringing deals at below 4%.

Last month the Bank of England left interest rates unchanged at 5.25% for the fourth time in succession. New Bank data shows that mortgage approvals rose in January to their highest level since October 2022.

Figures from property website Zoopla also reveal that sellers continued to return to the market in February with house sales predicted to increase by 10% this year. According to the portal, agreed sales were up by 15% and buyer demand up by 11% on February 2023 with the market on track to reach 1.1million transactions across the year, up from one million.

However, some uncertainty about the future path of interest rates remains. Mr Gardner said: “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.”

Read more about this story on the Guardian website.