For the first time in over a year, the UK has seen an increase in house prices on a yearly basis, as reported by Nationwide on Friday. This indicates a bounce-back in the housing market, thanks in part to reduced mortgage rates.
Nationwide shared that the February prices were up by 1.2% compared to the previous year, marking the first year-on-year growth since January 2023.
There was also a 0.7% rise in prices from January to February of the current year.
Robert Gardner, Nationwide’s chief economist, attributed the raise in housing activity to lower borrowing costs seen at the year’s start.
He observed that the current property values are just 3% shy of the peak seen in summer 2022, before the real estate market felt the effects of interest rate hikes by the Bank of England and financial instability during Liz Truss’s tenure.
Responses from Industry Experts:
Jeremy Leaf, a North London real estate agent, commented: “Assessing the housing market solely by property prices isn’t enough. While prices influence confidence levels, factors like transactions and affordability are crucial, especially in expensive areas like London. Our offices are experiencing more positive activities than last year, which are turning into sales. Despite this, the market is still sensitive to pricing, and only reasonable prices draw buyers’ interest, necessary for sustained market improvement.”
Iain McKenzie, CEO of The Guild of Property Professionals, said: “We anticipate a resurgence in the housing market and are encouraged by the return to yearly price growth. The stability of interest rates gives us hope that they will decrease this year, benefiting first-time buyers with better deals. This recovery signifies an active market that should encourage buyers and foster growth in property sales.”
Tom Bill, head of UK residential research at Knight Frank, noted: “Encouraged by stable base rates, buyers are pushing demand and prices up. Recent mortgage rate increases remind sellers of the importance of correct pricing. We predict a positive annual growth in 2024, with house prices rising by 3%.”
Nathan Emerson, CEO of Propertymark, remarked: “The market typically responds to economic shifts, and the recent increase in house prices is promising, boosting confidence for potential sellers. As the economy shows positive signals, the government should leverage this momentum.”
Matt Thompson of Chestertons mentioned: “With mortgage rates decreasing and interest rates holding at 5.25%, buyer confidence is higher, leading to an increase in home listings.”
Nicky Stevenson, MD of Fine & Country, shared: “There is a growing sense of optimism in the property market this year, with an uptick in annual house price changes. With inflation falling, the market could soon experience a surge of demand, especially as one of the peak seasons for home sales approaches.”
Jonathan Hopper, CEO of Garrington Property Finders, added: “The increase in house prices is not just a temporary spike but a sign of recovery. With mortgage affordability improving and a sense that the market is turning, many prospective buyers who hesitated are now considering making a move.”
