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UK property prices exhibit first annual increase since August

uk houses

The prices of homes being put up for sale in Britain have risen in annual terms for the first time in six months as demand from buyers strengthened, according to an industry survey that added to signs of stabilisation in the housing market.

Property website Rightmove said on Monday that asking prices for homes rose 0.1 per cent in February compared to a year earlier, the first annual increase since August 2023.

Prices increased by 0.9 per cent from January, broadly in line with the 10-year average of a monthly 1.0 per cent rise in February.

After a slowdown, Britain’s property sector has picked up in recent months as mortgage interest rates fell on expectations that the Bank of England will lower borrowing costs this year.

A measure of agreed sales in the first six weeks of 2024 was up 16 per cent from a year earlier and was 3 per cent higher compared with 2019, before the coronavirus pandemic, Rightmove said.

Properties coming onto the market and buyer enquiries increased by 7 per cent.

Tim Bannister, Rightmove’s director of property science, said he was only cautiously optimistic with mortgage rates still elevated in historical terms.

BoE officials have said they need to see further evidence of inflation pressures easing before cutting rates, despite the economy falling into a recession late last year.

“While the mortgage market has recovered its stability, there are growing signs that the room for lenders to reduce rates further is narrowing, and that rates will settle at elevated levels for the near future,” Rightmove said.

Monday’s survey chimed with other signs of an improvement in Britain’s housing market.

The Royal Institution of Chartered Surveyors reported this month the biggest jump in new buyer enquiries in nearly two years. Mortgage lenders Nationwide and Halifax both reported a rise in house prices in January.

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