Most of the main House Price reports suggested that February showed some positive growth for house prices.
The Halifax House Price Report, prices rose for the fifth consecutive month. In February, it states that prices rose by 0.4% which is £1091 in cash terms. This made the average price in their report £291,699 and made prices +1.7% higher than a year ago. This is a slow down from the +2.3% year on year growth it reported for January.
The Nationwide House Price Report also reported a monthly increase. Its report stated a +0.4% increase for February which made the year on year a positive of +1.2% which is up from -0.2% for January. Its average house price is now at £260,420.
The Rightmove Report which focuses on asking prices, reported a rise of 0.9% in February to £362.839. The report went on to say – “Perhaps more noteworthy is that average prices are now up by 0.1% compared to this time last year, following annual falls in every month since August 2023, one of several signs of growing market momentum.”
However, the Hometrack report which reviews house prices at a regional level, states a year on year negative figure of -0.5%. It does go on to say that there is a year on year increase of +15% in the amount of sales agreed and +21% in the amount of homes that are available for sale. The important part that this report plays is that although the national average may be higher, this isn’t the case for everywhere.
Good Times Ahead?
Although these reports could suggest some positive momentum, there have been some events that have occurred that could have an impact on prices in the immediate future.
Firstly, the UK is in a technical recession. Although this means different things for different people and is based on a previous quarter’s data, the word itself can have an effect on confidence which does play a part in the housing market.
Secondly, mortgage rates have crept up over the last month. Most of the main lenders have increased their fixed rates from somewhere between 0.1% – 0.5% in February which may cause concern for some borrowers or perhaps cause them to see whether rates will reduce again over the coming months.
We are still seeing good activity levels with mortgage enquiries, especially when compared to the last 12 – 18 months. However, it will be interesting to see activity in the purchase market over the next 3-6 months to really gauge where the housing market is heading in 2024.
