House prices rise as property market builds momentum
House prices grew 1.3 per cent year on year to February, in the strongest growth in four months, as the property market continues its steady start to the year.
Prices rose by 0.3 per cent between January and February, with the average UK property price at a new high of £301,151, according to Halifax’s house price index.
The housing market had been struggling after months of speculation around last year’s Budget hit buyer confidence, but analysts say steady price growth signals the sector is beginning to recover.
The strongest price growth is concentrated in the North, while prices fell by 2.2 per cent in the South East and one per cent in London year on year.
Amanda Bryden, head of mortgages at Halifax, said: “There’s no doubt that affordability remains stretched, supply is constrained, and regional disparities persist.
“However, conditions have been gradually improving, with easing interest rates and real wage growth helping to support buyer confidence.”
Bryden said the conflict in the Middle East and the interest rate rise which could come from the Bank of England in response mean sector recovery will be slow.
She said: “Looking ahead, geopolitical uncertainties seem set to influence the outlook for inflation and the wider economy.
“Against that backdrop, markets are now anticipating a more gradual path for interest‐rate reductions. If realised, the speed at which borrowing costs ease may be tempered.”
First-time buyers ‘need more support’
Mary-Lou Press, president of estate agency association Propertymark, said price growth demonstrates the newfound resilience of the property market.
“However, while rising prices may reflect market strength, they also present clear challenges. Without meaningful support for those stepping onto the housing ladder, higher property values will inevitably push up deposit requirements and borrowing thresholds,” she said.
The encouraging figures come in a dramatic week for the housing sector, in which the bosses of the UK’s two biggest house builders – Barratt Redrow and Vistry – announced they are quitting.
The retirement of Vistry chief executive Greg Fitzgerald caused a 20 per cent drop in the house builder’s share price, and followed financial results which saw output fall – which the firm blamed on last year’s Budget uncertainty.
On Thursday, the chair of estate agency Foxtons said “government-driven” costs are causing his firm to face falling profit despite growing revenue.