The Nationwide Building Society has reported that UK annual house price growth continued to edge higher in February rising to 2.3%, from 1.9% in January – the strongest rate for 18 months.
There was a 0.3% rise month-on-month, after taking account of seasonal factors.
The average price of a home is now £216,092.
Robert Gardner, Nationwide’s chief economist, said: “While overall economic growth ground to a halt in the final three months of 2019, labour market conditions remained buoyant and borrowing costs low. The decisive election outcome may have provided a boost to buyer sentiment.
“Recent data releases indicate that the housing market has gathered momentum in recent months and the latest house price figures are in line with that trend. The number of residential property transactions and mortgages approved for house purchase increased around the turn of the year and surveyors have reported an increase in new buyer enquiries.
“Looking ahead, economic developments will remain the key driver of housing market trends and house prices. Business surveys suggest that activity recovered in the New Year, but there are still significant uncertainties that threaten to exert a drag on the economy in the coming quarters.
“The global economic backdrop remains challenging, with the coronavirus outbreak expected to weigh on global activity in the coming quarters. Investment is likely to remain subdued until the UK’s future global trading relationships become clearer, which is unlikely until early next year.
“Overall, we expect the UK economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat in 2020 as a whole.”
Guy Harrington, CEO of real estate lender Glenhawk, added: “Just how quickly the market seems to have recovered may be surprising even the most optimistic of observers. Macro headwinds notwithstanding, the contrast between the state of the market today versus 12 months ago is stark and just shows the effect that domestic stability can have on both consumer and lender confidence.
“The Budget is up next, and it will be fascinating to see if the new Chancellor’s supposed ‘loosening of the purse strings’ extends to those current and potential homeowners most in need of some stimulus.”