Annual growth in house prices turns positive for first time since January 2023

Annual growth in house prices turned positive for the first time in around a year in February, according to an index.

Across the UK, property values increased by 1.2 per cent annually in February, following a 0.2 per cent fall in January, Nationwide Building Society said.

It marked the first month sincejanuary2023thatnationwide recorded positive annual growth in house prices. In that month, there was a 1.1 per cent year-on-year increase.

On a month-on-month basis, house prices increased by 0.7 per cent in February, taking the average UK house price to £260,420.

Robertgardner,nationwide’s chief economist, said: “House prices are now around 3 per cent below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.”

He continued: 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 reportedariseinnewbuyer inquiries.

“Nevertheless, near-term prospects remain highly uncertain, in part due to ongoing uncertainty about the future path of interest rates. After falling sharply in late December, swap rates, which underpin fixed rate mortgage pricing, have drifted back up. “Borrowingcostsremain 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. “Whilethesqueezeonhousehold budgets is easing, with wagegrowthnowoutstripping inflation by a healthy margin, it willtaketimetomakeupforthe ground lost over the past few years.”

Earlier this week, the Bank of England said that the number of mortgage approvals for home buyers jumped to the highest level since October 2022 in January this year.

HM Revenue and Customs figures showed this week that 82,000homesalestookplacein January, which was 12 per cent lower than January 2023 and the lowest level of house sales recordedinjanuarysince2013.