Recovery in the housing market as prices rise

HOUSE prices unexpectedly rose in February – easing fears of a sharp slowdown.

It came as a Bank of England official said she saw signs of recovery in the housing market as well as ‘more competition’ among lenders to lure back buyers.

The cost of a home in the UK went up by 1.1 per cent last month compared with a 0.2 per cent increase in January, pushing the average price to £285,476 from £282,360, according to lender Halifax.

It was a better performance than predicted, with analysts having forecast a decline of 0.3 per cent for February.

Kim Kinnaird, at Halifax Mortgages, said recent falls in mortgage rates and a stable jobs market were boosting confidence among potential homebuyers and helping to ‘stabilise prices’ following drops in November and December when the fallout from Liz Truss’s ‘mini-budget’ caused borrowing costs to spike.

While prices were still £8,500 lower than the peak reached in August last year, Ms Kinnaird said they remained £9,000 ahead of those seen at the start of last year and were ‘still above pre-pandemic levels’.