Ammon News - UK house prices increased for the first time on an annual basis in more than a year in February, as a decline in borrowing costs prompted growth in the housing market, according to a survey by Nationwide.

The average price of a home rose to £260,420, up by 0.7% from the month before, and 1.2% higher compared with a year earlier, the research for Britain’s biggest building society found. This is the first annual growth since January 2023, and follows a 0.2% year-on-year drop in January.

House prices are still about 3% below the record highs reached in the summer of 2022.

Buyers and sellers continued to return to the property market last month, and are expected to increase the number of home sales by 10% this year, according to the property website Zoopla.

The Nationwide chief economist, Robert Gardner, said: “The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market.”

Mortgage rates have eased since hitting a 15-year high last July, when high inflation led to increased market bets on the Bank of England’s benchmark rate peaking at 6.5%.

The average two-year fixed residential mortgage rate climbed to 6.66%, above the levels reached in the aftermath of the previous autumn’s mini-budget crisis, according to the data provider Moneyfacts. However, the Bank’s base rate has so far peaked at 5.25%, and the average two-year mortgage fix is now at 5.76%.

The Guardian