The annual rate of house price growth remained broadly stable in February at 3.9%, compared with 4.1% in January, according to the latest HPI figures from Nationwide.
The latest data also reveals that house prices were up 0.4% month on month – the sixth consecutive monthly gain.
Commenting on the figures, Nationwide’s chief economist Robert Gardner 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.
“In terms of the pattern of transactions, it is notable that first-time buyer activity continued to recover, with mortgage completions in 2024 just 5% below 2019 levels. This represents a solid performance, given the interest rate environment – for example, five-year fixed mortgage rates are currently around 4.4% (for borrowers with a 25% deposit) compared to around 2% in 2019.”
April Mortgages chief operating officer Mark Eaton commented: ““A monthly increase of 0.4% is no modest feat, considering it is the sixth consecutive month of growth recorded by Nationwide.
“There are millions of Brits trapped in the costly rental market, and those looking to escape and get on the property ladder are keeping demand high and the market buoyant. At the same time, houses aren’t being built fast enough to meet that demand.
He added: “The further house prices continue to climb up, the more out of reach homeownership becomes for first-time buyers.”
“Many parts of the country have been unaffordable to buy for years. Our own research shows that in some areas, buyers need deposits of more than £200,000 to afford an average priced home based on typical lending limits imposed by the major banks.”
ASK Partners chief executive Daniel Austin said: “Despite a rise in house prices, we believe that growth is likely to face pressure and remain steady, as higher borrowing costs start to affect buyers, despite the market’s continued resilience. Investors and developers in the residential sector remain motivated by the supply demand imbalance and under the new government, we think there will be more projects that get off the ground.”
He added: “We are seeing a greater variety of housing options, such as co-living schemes, coming to market which fulfil the growing requirements of younger professional buyers. If prices flatten and interest rates start to fall, we will see more first-time buyers able to step onto the property ladder.”
