The annual rate of house price growth remained broadly stable in February at 3.9%, compared with 4.1% in January, data from Nationwide’s latest House Price Index has revealed.
On a monthly basis, the index found that house prices rose by 0.4%.
The average price increased to £270,493, up from £268,213 in January.
Robert Gardner, chief economist at Nationwide, said: “The price of a typical UK home rose by 3.9% year on year in February, similar to the annual pace of growth seen in January.
“House prices increased by 0.4% month on month, after taking account of seasonal effects – the sixth consecutive monthly gain.
“Housing market activity has also remained resilient in recent months, despite ongoing affordability challenges.
“Indeed, the second half of 2024 saw a noticeable pick up in total housing transactions, which were up 14% compared with the same period in 2023.”
He added: “However, taking 2024 as a whole, transactions were still modestly (6%) lower than the levels prevailing before the pandemic struck in 2019.
“In terms of the pattern of transactions, it is notable that first-time buyer activity continued to recover, with mortgage completions in 2024 just 5% below 2019 levels.
“This represents a solid performance, given the interest rate environment – for example, five-year fixed mortgage rates are currently around 4.4% (for borrowers with a 25% deposit) compared to 2% in 2019.”
Reaction:
Amy Reynolds, head of sales at Antony Roberts:
“Property prices are not running away with themselves, due to affordability constraints, higher mortgage rates and cautious buyer sentiment.
“The imminent end of the Stamp Duty holiday brought a flurry of new activity, which is coming to an end but being replaced with buyer demand for houses in the £1m to £2m range, as we would expect at this time of year in a more ’normal’ market.
“Any fully-renovated home is bucking the trend and will be popular regardless of the price point. Prices are unlikely to fall because there is limited stock in prime areas, but equally prices won’t rise until mortgage rates are deemed to be more ‘affordable’ again.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“With some lenders pulling their cheapest fixed rates, at the same time as others are launching them, the market is very jittery which makes it difficult to plan ahead.
“The recent surprise increase in inflation has reduced the likelihood of another imminent reduction in interest rates.
“It wasn’t so long ago that there was talk of five potential interest rate cuts this year, but that is looking increasingly unlikely.
“Borrowers must plan ahead as much as possible and seek advice from a whole-of-market broker.
“Locking into a rate makes sense and gives peace of mind when there is so much uncertainty and if rates are cheaper by the time you come to take out your mortgage, it should be possible to switch to a cheaper deal at that time.”
Nathan Emerson, CEO of Propertymark:
“Year on year it is positive to see progression within the housing market, and it is encouraging to see momentum continue as we head further into 2025.
“There are still aspects to be mindful of, however, such as how inflation could influence future base rate decisions and what effect on affordably that could have.
“With inflation now sitting at 3%, which is above the Bank of England’s initially targeted level, we could see it becoming potentially more challenging for people to approach the buying and selling process should this translate into higher interest rates as a result.”
Verona Frankish, CEO of Yopa:
“The UK property market has begun the year on the front foot and we’re now seeing the rate of house price growth start to accelerate, as more buyers push on with their plans to purchase following a brief respite over the Christmas period.
“A degree of this increased activity in recent months has, of course, been spurred by the impending stamp duty deadline at the end of March, with those making their move keen to reach completion and avoid any increased cost when buying.
“However, we’ve seen the vast majority of buyers take the potential Stamp Duty cost increase into consideration before submitting their offers, so whilst there may be a momentary market correction, we expect momentum to continue building beyond 1st April.”
Marc von Grundherr, director of Benham and Reeves:
“A consistently positive performance has been the theme for the UK property market over much of the last year and this theme has so far continued in 2025.
“House prices may not be climbing at the same rate as previous market peaks, but some may argue that this more measured rate of growth is far healthier for the market, particularly when you consider that first-time buyer activity is on the up, despite the fact that this market segment faces the toughest task with respect to affordability.”
Karen Noye, mortgage expert at Quilter:
“House price growth picked up the pace a little in February, with the average house price rising 0.4% on a month on month basis.
“With the upcoming changes to Stamp Duty in April, we could see this monthly uptick continue.
“The sharp rise in tax bills expected due to the lowering of Stamp Duty thresholds has seen many buyers forge ahead with purchases that they might otherwise have held out on, and house prices could bloat as a result.
“While prospective buyers will need to take care that they do not end up paying over the odds for a home, particularly given they will now be cutting it very fine to get a sale across the line before the change comes in, it is understandable that they would wish to mitigate the tax bills.
“The Government’s decision not to extend the increase to the Stamp Duty threshold will pile even more pressure on prospective first-time buyers in particular.
“Those who have been scrimping and saving to build an adequate deposit will soon find themselves facing a hefty tax bill of up to £5,000, eroding affordability further and making homeownership all the more expensive.
“On a slightly more positive note, the Bank of England’s recent interest rate cut has seen lenders trim mortgage rates which should help ease affordability pressures somewhat.
“While inflation is higher than the Bank would like, the need to stimulate the economy could result in further cuts and we could see demand for housing picking back up.”
Tomer Aboody, director of specialist lender MT Finance:
“The lower mortgage rate environment we have experienced over the past 12 months has helped maintain steady market activity both for first-time buyers and buy-to-let landlords, along with buyers looking to upsize and downsize.
“The banks have been more encouraged to lend and have been more flexible in their approach.
“With the looming changes to stamp duty upon us, some are more apprehensive about the upcoming months and how the market will react to the fallout from Reeve’s October Budget.
“Many are hoping for further rate cuts or increased flexibility from lenders.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“We have noticed, in our offices, a rush of first-time buyers in particular, trying to take advantage of lower Stamp Duty rates, which has skewed some parts of the market.
“Now it is almost too late to benefit from the concession, we are seeing prices settle and more balance between supply and demand.
“However, a shortage of houses, not flats, in some price ranges remains, which is continuing to drive interest and helping to maintain activity.”
Jason Tebb, president of OnTheMarket:
“The housing market continues its strong start to the year as the impending end to the Stamp Duty concession next month galvanises buyers and sellers.
“Base-rate reductions are having a positive impact on affordability and activity.
“Two quarter-point base-rate cuts in the second half of last year, followed by one earlier this month, is certainly helping sentiment and boosting transactions.
“Affordability concerns have been an issue for a while with rates higher than many borrowers have grown used to, along with the higher high cost of living and other pressures.
“With the markets expecting more rate reductions this year, this should give those buyers who are reliant on a mortgage for their purchase increased confidence about doing so.
“As more stock comes to market in order to take advantage of the traditionally busy spring market, values not running away with themselves.
“Buyers remain sensitive on price and won’t pay over the odds, so sellers should seek advice and price accordingly.”
Mark Eaton, chief operating officer April Mortgages:
“Another month of rising house prices may come as a surprise during the industry’s traditionally quieter time of winter, and there are a few signs of softening.
“A monthly increase of 0.4% is no modest feat, considering it is the sixth consecutive month of growth recorded by Nationwide.
“There are millions of Brits trapped in the costly rental market, and those looking to escape and get on the property ladder are keeping demand high and the market buoyant.
“At the same time, houses aren’t being built fast enough to meet that demand.
“The further house prices continue to climb up, the more out of reach homeownership becomes for first-time buyers.”
Tom Brown, managing director, real estate at Ingenious:
“Today’s data shows that the resilience and appeal of the UK property sector persist.
“Though we have seen higher inflation and sticky borrowing rates, we welcome the BoE’s recent rate cut and what will hopefully be the start of the much needed falling rate cycle.
“There’s clearly a significant and notable shortage of housing inventory across various price brackets and locations.
“Consequently, any decline in homeowner sales is likely counterbalanced by increased demand from renters and investors.
“This is a trend that is not going away. However, it’s crucial to recognise that the situation isn’t consistent nationwide or across different property pricing brackets.
“It’s helpful to delve into subsectors and regional dynamics when assessing opportunities, as a broad market view can be misleading.
“In the real estate sector, we’re seeing significant investment capital for assets for long-term rental.
“On account of their scale and buying power, these typically institutional investors face fewer disruptions than owner occupiers or small-scale buy-to-let investors.”
