House prices continued to increase in February, according to Nationwide’s latest House Price Index, with the average property price rising 0.4% month on month to reach £270,493.
It is the sixth consecutive month that house prices have risen. Annual growth was up 3.9% in February, slightly lower than the 4.1% growth seen in January.
Robert Gardner, chief economist at Nationwide, said: “Housing market activity has also remained resilient in recent months, despite ongoing affordability challenges. Indeed, the second half of 2024 saw a noticeable pick up in total housing transactions, which were up 14% compared with the same period in 2023.
“However, taking 2024 as a whole, transactions were still modestly (6%) lower than the levels prevailing before the pandemic struck in 2019.”
First-time buyer activity continues to recover, the building society said, with mortgage completions for this group currently just 5% lower than in 2019.
The report said that changes to Stamp Duty at the start of April are likely to generate volatility in transactions in the near term, with buyers bringing their purchases forward to avoid the additional tax. This will likely lead to a jump in transactions in March, followed by a quieter period in the following months, as occurred in the wake of previous Stamp Duty changes.
Mortgage rates remain relatively high compared to 2019. However, recent weeks have seen several lenders, including Nationwide, trim their mortgage rates in response to February’s base rate cut.
There are signs that higher Stamp Duty costs and regulatory changes are having a cooling effect on the Buy to Let market, although easing mortgage rates are helping landlords raise finance.
“Activity remains quite subdued compared to historic levels," said Mr Gardner. “However, it is important to note that some cash purchases are also undertaken by landlords and that activity in this space appears to have remained more buoyant.”
