Annual UK house price growth slowed to 8.1% in February down from 8.4% in January, according to the latest Zoopla House Price Index.

However, Zoopla’s data confirmed the figure represents a significant rise from the 4.2% reported last year.

The property expert said that the rise in prices comes after a busy start to the year, with buyer demand easing slightly compared to January, but remaining “unseasonably high”.

The latest figures took the average value of a UK home to £245,200, with Wales registering the highest regional price growth for the twelfth consecutive month, at 11.8%. London price growth remained the slowest at 3.2%.

Zoopla added that the localised nature of the market is also demonstrated at a city level, with Liverpool leading price growth among the UK’s largest cities at 10.3% on the year, and 32% over the last five years. Nottingham followed, registering 9.5% annual growth and a 36% rise in values since 2017. This contrasted with an annual decline in prices of -0.2% in Aberdeen since February last year, and a -13.5% decline over five years.

Zoopla head of research, Gráinne Gilmore, said: “High buyer demand and rising supply signal activity levels will remain elevated in the short term. As we move into H2, economic headwinds, including the rising cost of living and rising mortgage rates will act as a brake on price growth, with annual value rises returning to more sustainable levels.”

According to Zoopla’s index, affordability levels are a “key factor” in the spread of price growth across the country.

The largest price growth has been registered in markets with the highest demand and lower average prices, with the average price of a home in Wales sitting at £186,200, down on the UK average of £245,200. Zoopla suggested that changed working practices in the wake of the pandemic, as well as local economic conditions and property types are also factors at play in the range of value growth recorded across the country.

Hargreaves Lansdown senior personal finance analyst, Sarah Coles, commented: “The Zoopla figures show that sellers are flocking to the market, with some keen to lock in property price rises while they still can. Meanwhile, although demand remains higher than usual for the time of year, it has fallen since the start of 2022. So the balance of supply and demand is changing.

“At the moment, the shifting balance of supply and demand is making life slightly easier for buyers, and has boosted the number of sales agreed, but it hasn’t yet started to hurt sellers. Buyers are still outnumbering sellers, and the stock of homes is still 42% below the five-year average.

“However, it’s worth keeping an eye on whether this balance continues to shift. There’s every chance it will, as soaring bills and prices – alongside rising mortgage costs – convince more people that now is not the time to over-stretch their finances. We’re expecting buyer demand to slow as we go through 2022.”

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