Nationwide: Annual house price growth strongest since 2018
Annual house price growth reaches 2.3%, which is the strongest rate for 18 months according to the latest Nationwide House Price Index.
There was 0.3% month-on-month increase, with the average house price in February reaching £216,092.
Robert Gardner, chief economist at Nationwide, said: “While overall economic growth ground to a halt in the final three months of 2019, labour market conditions remained buoyant and borrowing costs low.
“The decisive election outcome may have provided a boost to buyer sentiment.
“Recent data releases indicate that the housing market has gathered momentum in recent months and the latest house price figures are in line with that trend.
“The number of residential property transactions and mortgages approved for house purchase increased around the turn of the year and surveyors have reported an increase in new buyer enquiries.
“Looking ahead, economic developments will remain the key driver of housing market trends and house prices.
“Business surveys suggest that activity recovered in the new year, but there are still significant uncertainties that threaten to exert a drag on the economy in the coming quarters.
“The global economic backdrop remains challenging, with the coronavirus outbreak expected to weigh on global activity in the coming quarters.
“Investment is likely to remain subdued until the UK’s future global trading relationships become clearer, which is unlikely until early next year.
“Overall, we expect the UK economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat in 2020 as a whole.”
Andrew Montlake, managing director of Coreco, added: “Now that the Brexit burden has been lifted, the property market is feeling significantly more upbeat.
“There are more buyers, more properties coming onto the market and mortgages that are about as competitive on price as it gets.
“We’re by no means out of the woods yet, as trade negotiations with the EU could easily turn sour and hit sentiment, and there’s the small matter of the March Budget, but for now the tempo of the market is improving by the day.
“Even though asking prices are higher than they were in the closing stages of 2019, for now buyers are playing ball given the extremely low cost of borrowing.
“First-time buyers are particularly active as they are the ones who will lose out the most if property prices start to run away.
“We expect to see more transactions and a pick up in the rate of price growth during 2020 but the trade negotiations taking place in the background should keep the property market honest.”
Tomer Aboody, director of MT Finance, added: “February was a positive month for the housing market.
“Looking forward we expect this positivity to continue but with the possible pandemic of the coronavirus hitting the financial markets, this could have an impact on all-important property confidence.”
Guy Gittins, managing director at Chestertons, said: “There is an air of optimism in the housing market which has been lacking since the referendum and more and more households are now actioning long delayed plans regarding their homes.
“Buyer demand is currently outpacing availability and sales would almost certainly have been even higher but for a shortage of available stock – a situation which is most acute in the higher value locations in London.
“In the first seven weeks of this year we have seen a 100% increase in portal enquiries, a 34% increase in new buyer registrations, a 41% increase in property viewings and a 28% increase in offers made on properties compared to the same period in 2019.
“However, the number of available properties at the end of the period was 14% lower.
“The government has an ideal opportunity in next month’s Budget to provide a further boost to the housing market.
“We would like to see the Chancellor raise the bottom rate stamp duty threshold and lower the top rate as Boris Johnson suggested during his campaign to be Prime Minister.”
These figures come following latest data from the ONS revealing that total household net wealth amounted to almost £14.6tn between April 2016 and March 2018.
The ONS Wealth and Assets Survey also revealed that the wealthiest 10% of households held around 45% of total household wealth, 39% of net property wealth and 66% of other financial wealth.
By contrast, the “lower” 50% of households held less than 10% of total wealth, property wealth and private pension wealth, and 2% of other financial wealth.
Aboody added: “The percentage split of wealth in the UK isn’t surprising.
“Money is usually invested in bricks and mortar, long seen as a solid investment.
“This further proves more homes need to be built so that the opportunity to get on the ladder is for the many, rather than the few.”