House prices rise more than expected in February - Nationwide

(Sharecast News) - UK house prices rose more than expected in February, according to data released on Friday by mortgage lender Nationwide. Prices were up 0.4% on the month following a 0.1% increase in January, beating expectations for a 0.2% jump.

On the year, house prices rose 3.9% in February, down from 4.1% the month before.

The average price of a home stood at £270,493, up from £268,213.

Nationwide chief economist Robert Gardner said housing market activity has remained resilient in recent months, despite ongoing affordability challenges.

"Indeed, the second half of 2024 saw a noticeable pick up in total housing transactions, which were up 14% compared with the same period in 2023," he said. "However, taking 2024 as a whole, transactions were still modestly (6%) lower than the levels prevailing before the pandemic struck in 2019.

"In terms of the pattern of transactions, it is notable that first-time buyer activity continued to recover, with mortgage completions in 2024 just 5% below 2019 levels. This represents a solid performance, given the interest rate environment - for example, five-year fixed mortgage rates are currently around 4.4% (for borrowers with a 25% deposit) compared to c2% in 2019.

"Cash transactions remained particularly robust, with activity 2% above pre-pandemic levels."

Looking ahead, Gardner said changes to stamp duty at the start of April are likely to generate volatility in transactions in the near term, as buyers bring forward their purchases to avoid the additional tax.

"This will likely lead to a jump in transactions in March, and a corresponding period of weakness in the following months, as occurred in the wake of previous stamp duty changes."