House prices rise for first time in over a year


For the first time in over a year house prices are more expensive than they were 12 months previously as high mortgage bills have not dampened demand for homes, according to the UK’s largest building society.

While the cost of buying a house or flat slightly increased from month to month at certain points during the last year, houses were generally cheaper on an annual basis.

Money blog: How Taylor Swift’s UK Eras tour is affecting hotel prices

But annual house-price growth returned in February, increasing 0.7% month on month, Nationwide said – something that had not been recorded since January 2023.

The average house price is £260,420, a 1.2% rise from February 2023.

Just a month ago prices fell 0.2% annually.

The reversal comes as mortgage rates continued to come down.

More on House Prices

“For months at the end of 2023, buyers were sitting on their hands, waiting for a break in the clouds,” said Sarah Coles, head of personal finance at Hargreaves Lansdown. “Now they’ve snapped up cheaper deals and are hunting for a new home.”

Mortgage rates on rise

This may not mean the cost of a new property continues to go up, as mortgage rates have been back on the rise as banks reassess their expectation of an imminent interest-rate cut by the rate-setters at the Bank of England.

The typical mortgage rate for a 5-year fixed deal is 5.33% and 5.75% for an average 2-year deal, according to financial information company Moneyfacts.

House prices are still roughly 3% below the all-time highs of summer 2022 when pent-up COVID-era demand coupled with high savings levels were unleashed and drove prices upwards.

A 5% rise over the 12 months is forecast in line with the likely increase in wages, according to the chief UK economist Pantheon Macroeconomics, Samuel Tombs.

Revival expected to slow

“There is some risk, however, this housing revival will take a breather in the next couple of months as markets have pushed back their expectations for interest-rate cuts, leading some mortgage rates to tick up. Yesterday’s money and credit data suggest that households continue to manage their finances cautiously.”

Listen and subscribe to The Ian King Business Podcast here.

On Monday the competition watchdog launched an inquiry into eight major housebuilders and said too few new homes are being delivered due to a “complex and unpredictable” planning system and the gap between what private developers are building and what people need is widening.

Fewer than 250,000 new homes were built last year across Britain – well below the 300,000-target for England alone, the Competition and Markets Authority said.

Articles You May Like

Hyundai IONIQ 9 three-row electric SUV preps for debut following US sighting
Aching Astros call up pitching prospect Arrighetti
Daily EV Recap: Gigafactory India might be in the works
Police to review decision to charge Caroline Flack with assault
Alexander says he’s not in portal, to stay at USC