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| Average house price creeps up to £196,930, says Nationwide | Average house price creeps up to £196,930, says Nationwide |
| (35 minutes later) | |
| The average price of a house in the UK rose by 0.3% in February to £196,930, according to the country’s biggest building society. | The average price of a house in the UK rose by 0.3% in February to £196,930, according to the country’s biggest building society. |
| Despite signs of strong activity in the mortgage market at the start of the year, Nationwide’s figures, which are based on loans it approved during last month, show prices remained steady. | Despite signs of strong activity in the mortgage market at the start of the year, Nationwide’s figures, which are based on loans it approved during last month, show prices remained steady. |
| The monthly increase matched the rise in January, and although the annualised rate of growth increased to 4.8%, from 4.4% the previous month, the lender said it had remained in a fairly narrow range, between 3% and 5%, since the summer. | The monthly increase matched the rise in January, and although the annualised rate of growth increased to 4.8%, from 4.4% the previous month, the lender said it had remained in a fairly narrow range, between 3% and 5%, since the summer. |
| Separate figures from rival lender Halifax showed a 1.4% fall over the month, although annual growth was at 9.7%. The bank said prices were rising “at a robust pace”. | |
| Halifax’s annual rate of change, which is based on a comparison of the three months to February with the same period last year, has been running higher than Nationwide’s for some months. Its monthly price movements have also tended to be more erratic, with the bank reporting a 1.7% increase in January. | |
| Nationwide’s measure of house prices underplays the extent to which the housing market is heating up again | Nationwide’s measure of house prices underplays the extent to which the housing market is heating up again |
| Nationwide’s chief economist, Robert Gardner, said recent activity was likely to have been driven by the new stamp duty surcharge on second homes, which comes into effect in April. “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,” he said. | Nationwide’s chief economist, Robert Gardner, said recent activity was likely to have been driven by the new stamp duty surcharge on second homes, which comes into effect in April. “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,” he said. |
| “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.” | “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.” |
| Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said Nationwide’s index was showing lower price growth than other measures, which could be a result of the sample it was based on. | Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said Nationwide’s index was showing lower price growth than other measures, which could be a result of the sample it was based on. |
| “Nationwide’s measure of house prices underplays the extent to which the housing market is heating up again,” he said. “The latest growth rates of all the other main measures of house prices have been significantly stronger over the last six months.” | “Nationwide’s measure of house prices underplays the extent to which the housing market is heating up again,” he said. “The latest growth rates of all the other main measures of house prices have been significantly stronger over the last six months.” |
| For January, the Land Registry reported a price increase of 2.5% and annualised growth of 7.1% – considerably higher than Nationwide’s figures. However, the lender’s figures cover the whole of the UK, while the Land Registry is only England and Wales, and growth has tended to be highest in England in recent times. They are also based on an earlier stage of the sales process. | For January, the Land Registry reported a price increase of 2.5% and annualised growth of 7.1% – considerably higher than Nationwide’s figures. However, the lender’s figures cover the whole of the UK, while the Land Registry is only England and Wales, and growth has tended to be highest in England in recent times. They are also based on an earlier stage of the sales process. |
| Tombs said: “We still expect the strengthening labour market, falling mortgage rates and a dearth of homes for sale to result in punchy house price increases this year.” | Tombs said: “We still expect the strengthening labour market, falling mortgage rates and a dearth of homes for sale to result in punchy house price increases this year.” |
| Halifax’s latest report put the cost of a house in the UK at £209,495, more than £16,000 higher than in February 2015. | |
| The bank’s housing economist, Martin Ellis, said: “Prices continue to rise at a robust pace driven by a significant imbalance between supply and demand. While this position is likely to continue over the coming months, there are some tentative signs that the supply situation may be beginning to improve. | |
| “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.” | |
| Howard Archer, chief UK economist at IHS Global Insight, said he expected prices to rise by about 6% over the year. However, he added that the EU referendum on 23 June was a “potential major downside risk to housing market activity and prices”. | |
| Archer said: “A vote for Brexit would be liable to see a marked hit to UK economic activity over the rest of this year and in 2017 amid heightened uncertainties, which would likely weigh down heavily on the housing market.” | Archer said: “A vote for Brexit would be liable to see a marked hit to UK economic activity over the rest of this year and in 2017 amid heightened uncertainties, which would likely weigh down heavily on the housing market.” |