Annual house price growth accelerated to a 10-month high in February, Nationwide Building Society has reported.
The average UK house price stood at £196,930 last month — 4.8 per cent higher than a year earlier and the strongest annual increase since April last year. Property values increased by 0.3 per cent month-on-month for the second month in a row. Robert Gardner, Nationwide's chief economist, said price increases have remained within a "fairly narrow range" of between 3 per cent and 5 per cent since summer 2015.
He said: “This trend was also maintained in February, with house prices up 4.8 per cent over the year, a slight pick-up from the 4.4 per cent increase recorded in January.” Mr Gardner said recent figures showing an increase in mortgage approvals are likely to be partly due to a looming stamp duty increase for buy-to-let investors, which starts from April.
He said: “This is likely to have brought forward a significant number of purchases, which in turn will probably result in a fall back in approvals during the spring/summer. “Looking through this volatility we expect the underlying pace of activity to increase in the quarters ahead as improving labour market conditions and low borrowing costs provide ongoing support.”
Mr Gardner said there has been a "particularly marked decline" in home ownership rates among young people in England over the past decade. He continued: "The latest English Housing Survey showed that the proportion of private renters who expect to buy a home at some point in the future declined by four percentage points from 61 per cent to 57 per cent — the lowest reading since the survey began in 2008/09. "Even amongst those who expect to buy a home, for most this remains a longer term aspiration, with 75 per cent expecting it to take at least two years."
A separate house price study released by Halifax showed house prices dipping by 1.4 per cent in February. Halifax put the average UK house price at £209,495, up by 9.7 per cent on a year earlier.
Martin Ellis, a housing economist at Halifax, said: "Prices continue to rise at a robust pace driven by a significant imbalance between supply and demand. "Whilst this position is likely to continue over the coming months, there are some tentative signs that the supply situation may be beginning to improve. Instructions for second-hand properties coming up for sale have increased in the past two months and the level of housebuilding increased significantly in 2015.
“Further ahead, increasing affordability issues, as house price increases continue to exceed wage growth, are likely to curb housing demand and cause price growth to ease.”