UK house prices see modest rise in February, buoyed by falling mortgage rates

House prices in the UK showed signs of strengthening in February, as evidenced by the latest house price data from property portal Rightmove.

Rightmove’s index revealed a 0.9% increase in average new seller prices for the month, translating to a modest 0.1% growth on a year-on-year basis.

This shift marks the first annual price increase after a half-year period of declines, contrasting with January’s figures where prices rose by 1.3% monthly but fell by 0.7% year-on-year.

The average asking price has now reached £362,839, with the first six weeks of 2024 witnessing a 16% surge in agreed sales compared to the same timeframe last year.

Additionally, both new listings and buyer enquiries have experienced a 7% year-on-year increase, indicating a rejuvenated market momentum.

Tim Bannister, director of property science at Rightmove, said: “Early-bird Boxing Day buyers got a head start in cherry-picking from a record level of new property choice and have now been joined by many other buyers also believing that 2024 offers the right market conditions to move.

“Mortgage rates have fallen considerably from their peak and are now remaining broadly stable after the uncertainty of late 2022 and 2023. Momentum to move in 2024 is continuing to build.”

Despite this positive trend, Rightmove has pointed out the market’s ongoing price sensitivity, with more affordable homes selling faster than their higher-priced counterparts.

The current average time to secure a buyer is notably longer than last year by over two weeks, marking the slowest pace since 2015 when excluding pandemic-related anomalies.

Tomer Aboody, director of property lender MT Finance, added: “As confidence starts to creep back into the market due to the reduction in mortgage rates and lower inflation, we are seeing higher sales volumes, with vendors encouraged to sell.

“Encouragingly, while sales have picked up, vendors are pricing correctly in order to attract buyers. This, in turn, is making a property purchase more affordable and appealing to buyers.

“Unless there is some dramatic intervention from the Government, we don’t expect to see a huge increase in pricing in the forthcoming 12 months or so.”