UK house prices climb again in February to reverse January decline

February saw house prices in the UK increase by 0.7% month-on-month after taking account of seasonal effects, reversing the 0.2% monthly decline in prices recorded in January.

According to the latest Nationwide House Price Index, the annual rate of house price growth rebounded to 6.9% in February, having climbed from 6.4% in January.

The return to a rise in house prices brought the average price to £231,061 during the month, the highest level on record.

Commenting on the figures, Nationwide chief economist, Robert Gardner, said the increase was as a “surprise”.

“It seemed more likely that annual price growth would soften further ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase,” Gardner commented.

“It may be that the stamp duty holiday is still providing some forward momentum, especially given the paucity of properties on the market at present. Shifts in housing preferences may also be providing a more significant boost to demand, despite the uncertain economic outlook.

“Many peoples’ housing needs have changed as a direct result of the pandemic, with many opting to move to less densely populated locations or property types, despite the sharp economic slowdown and the uncertain outlook.

“As a result, the outlook for the housing market is unusually uncertain. There is scope for shifting housing preferences to continue to boost activity, especially if there is further policy support in the Budget. Nevertheless, if labour market conditions weaken as most analysts expect, it is likely that the housing market will slow in the months ahead.”

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