The average UK house price jumped by 0.7% in February, according to the latest Nationwide House Price Index.

This resulted in an improvement in the annual rate of house price growth climbing to 1.2% in February, up significantly from -0.2% the previous month.

Nationwide’s data has suggested that house prices are now around 3% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.

This left the average UK house price at £260,420 in February, up from £257,656 in the first month of 2024.

Nationwide chief economist, Robert Gardner, said that the decline in borrowing costs around the turn of the year has “prompted an uptick” in the housing market.

“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,” Gardner said.

“Nevertheless, near-term prospects remain highly uncertain, in part due to ongoing uncertainty about the future path of interest rates. After falling sharply in late December, swap rates, which underpin fixed rate mortgage pricing, have drifted back up.

“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.

“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.”

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