Nationwide’s February House Price Index (HPI) revealed that average house prices now exceed £260,000 for first time, and the price of typical home is now 20% higher than in February 2020
Nationwide’s February House Price Index (HPI) reveals that annual UK house price growth was up by 1.7% month-on-month, increasing to 12.6% in February, from 11.2% in January.
The index also reveals that average house prices now exceed £260,000 for first time, and the price of typical home is now 20% higher than in February 2020.
Nationwide’s February growth data reflects that of other recently released HPIs. The Rightmove HPI for February revealed a 2.3% monthly increase, taking average prices to a record £348,804. Nationwide has advised that the average price differs between organisational HPIs ‘because the representative properties we track are slightly different’.
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said: Housing market activity has remained robust in recent months, with mortgage approvals continuing to run above pre-pandemic levels at the start of the year. A combination of robust demand and limited stock of homes on the market has kept upward pressure on prices.
The continued buoyancy of the housing market is a little surprising, given the mounting pressure on household budgets from rising inflation, which reached a 30-year high of 5.5% in January, and since borrowing costs have started to move up from all-time lows in recent months, he said.
The economic outlook is particularly uncertain at present. Nevertheless, it is likely that the housing market will slow in the quarters ahead. The squeeze on household incomes is set to intensify, with inflation expected to rise above 7% in the coming months, he said.
Walid Koudmani, chief market analyst at financial brokerage XTB commented: Annual UK house price growth increased to 12.6% in February, from 11.2% in January, prices up 1.7% month-on-month and with the average house price exceeding £260,000 for the first time. This contains the recent trend of widespread rising costs that may ultimately lead to economic difficulties if not addressed appropriately.
He said: While strong demand has managed to sustain prices thus far, the situation remains uncertain as inflation concerns along with increasing pressure on consumers may lead to a slowdown if the underlying issues are not resolved.