According to Nationwide data, UK house prices experienced a 0.7% month-on-month increase in February. This marks the first return to positive territory for the annual rate of change since January 2023. On a yearly basis, there is a 1.2% rise in prices, bringing the average cost of a typical UK home to £260,420 (not seasonally adjusted).
Speaking about these figures, Nationwide’s Chief Economist, Robert Gardner, points to decreasing borrowing costs and improving property prices. He said:
“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 reported a rise in new buyer enquiries.
Experts are reacting positively to the latest Nationwide House Price Index. For instance, Tom Bill from Knight Frank spoke about buyers expressing confidence in anticipating a declining base rate, which has increased demand and house prices in recent months.
He suggests that banks are eager to lend, and mortgage rates are expected to decrease later this year as inflation stabilises. This, in turn, is believed to sustain positive annual growth in 2024, resulting in a projected 3% increase in UK house prices.
It is interesting to note that Knight Frank had initially projected a marginal decline in property prices throughout 2024. However, they changed their forecast following an increase in activity in the market, as well as optimistic signs that inflation and the base rate would fall throughout the year.
Further Reading: Want to discover the best thing to invest in right now in the UK? RWinvest’s daily insights cover everything you need to know when looking at how to get into property investing!
