February sees first year-on-year house price rises in over a year, says Nationwide

UK house prices rose year-on-year for the first time in more than a year in February, according to Nationwide. 

The building society’s latest house price index showed prices were up 1.2% on the year last month, marking the first return to positive territory since January 2023. 

Month-on-month, prices rose 0.7% to an average price of £260,420. House prices are now around 3% below the all-time highs recorded in the summer of 2022. 

Robert Gardner, Nationwide’s chief economist, said the decline in borrowing costs around the turn of the year appeared to have prompted an uptick in the 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,” he said. 

However, Gardner warned that near-term prospects were nonetheless “uncertain” due to a lack of clarity about the future path of interest rates.  

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“Borrowing costs remain 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,” he said. 

“While the squeeze on household budgets is easing, with wage growth now outstripping inflation by a healthy margin, it will take time to make up for the ground lost over the past few years, especially given consumer confidence remains fragile.”