House price growth hits strongest rate for 18 months

Annual house price growth in the UK increased from 1.9% in January to 2.3% in February, reaching the strongest rate for 18 months, according to the latest Nationwide House Price Index.

New data revealed the average house price in the UK grew to £216,092 in February – up from £215,897 in January.

Nationwide suggested that it expects the UK economy to continue expanding at a ‘modest’ pace in 2020, with house prices remaining broadly flat during the year.

“While overall economic growth ground to a halt in the final three months of 2019, labour market conditions remained buoyant and borrowing costs low,” Nationwide chief economist, Robert Gardner, said. “The decisive election outcome may have provided a boost to buyer sentiment.

“Recent data releases indicate that the housing market has gathered momentum in recent months and the latest house price figures are in line with that trend. The number of residential property transactions and mortgages approved for house purchase increased around the turn of the year, and surveyors have reported an increase in new buyer enquiries.

“Looking ahead, economic developments will remain the key driver of housing market trends and house prices. Business surveys suggest that activity recovered in the New Year, but there are still significant uncertainties that threaten to exert a drag on the economy in the coming quarters.”

Bluestone Mortgages managing director, Steve Seal, commented: “A buoyant housing market will be welcomed by both buyers and sellers. However, for some, securing the necessary funding to purchase their first home continues to be a struggle.

“What’s clearly needed is greater awareness amongst these consumers on the alternative options available to them. The specialist lending market, for example, is there to support underserved customers, and it’s up to the industry to ensure that as many borrowers as possible are aware of what this industry can offer them.”

Head of Mortgages at online mortgage broker Trussle, Miles Robinson, added: “With house price growth at its strongest in the last 18 months, it’s certainly positive to see that more first-time buyers are taking hold of the homeownership schemes that are available to them.

“This house price growth means that buyers who have been hesitating to get onto the property ladder may be paying a higher price, but they can now jump into the spring market with renewed confidence.

“These figures suggest we’re in store for an active and healthy spring market. However, more needs to be done so that all first-time buyers feel properly supported on their home ownership journey and maintain any momentum in today’s already tough market.”

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