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House prices rise by 0.6% in February

House prices rise by 0.6% in February

Category: Mortgages

Updated: 01/03/2012
First Published: 01/03/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

House prices in the UK edged up by 0.6% in February, against a backdrop of increased mortgage lending.

Prices increased last month and have risen by 0.9% in the last year, taking the average price of a home to £162,712, figures from Nationwide show.

Evidence that house prices picked up a little in February follows a series of data releases suggesting that economic conditions may not be quite as weak as feared after the UK economy contracted in the final quarter of 2011.

Surveys of activity in the manufacturing and service sectors point to a rebound in January, while consumer confidence and retail spending were both stronger than expected during the month.

Housing transactions have also improved markedly, while mortgage approvals have also risen, although there is some doubt as to whether the trend will continue after the end of the stamp duty holiday.

"However, it remains to be seen whether this trend will be sustained," said Robert Gardner, chief economist of Nationwide.

"Given the still challenging economic backdrop this increase in housing market activity may be the result of a temporary rise in first time buyers entering the market to take advantage of the stamp duty holiday before it expires in March.

"If so, this may continue to support activity and prices in the near term before cooling over summer."

Up until 24 March, first time buyers are exempt from paying a 1% levy on house purchases worth up to £250,000.

Separate figures from the Building Societies Association also support the theory the first time buyers are inflating mortgage activity.

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