Annual House Prices Rise for First Time in a Year, Nationwide Reports

According to the Nationwide, property prices have experienced their first annual increase in over a year, marking a rise of 1.2% in February compared to the same month last year. While signs of activity are evident in the UK housing market, particularly with a rise in mortgage approvals reported by the Bank of England, the Nationwide emphasizes that the outlook remains uncertain.

Robert Gardner, Nationwide's chief economist, noted that the recent decline in borrowing costs has stimulated market activity, but the near-term prospects remain uncertain, largely due to ongoing uncertainty surrounding future interest rate movements. On a month-on-month basis, house prices also saw a 0.7% increase in February, with the average UK house price reaching £260,420. Despite this uptick, prices remain 3% below their peak in the summer of 2022.

The Nationwide's data only includes buyers with mortgages and excludes cash buyers and buy-to-let transactions, which currently account for over a third of housing sales. The rise in house prices, coupled with relatively high mortgage rates, may present challenges for potential first-time buyers, prompting expectations for government intervention in Chancellor Jeremy Hunt's upcoming Budget announcement. However, analysts caution that certain measures aimed at boosting the housing market could further accelerate house price rises and contribute to inflationary pressures.

Source: BBC News