House prices in the UK edged higher for the sixth consecutive month in February, with buyers pushing to complete purchases before upcoming stamp duty changes. The latest data from Nationwide, the country’s largest building society, showed an average price increase of 0.4% last month, up from 0.1% in January. This brought the typical property price for buyers using Nationwide to £270,493.
Over the past year, house prices have climbed by 3.9%, though this pace has slowed slightly compared to January’s 4.1% annual rate.
Housing market indicators reveal steady price growth following a period of weakness between mid-2023 and early 2024. Nationwide’s index is typically among the first snapshots of the housing sector, ahead of reports from Halifax and the Land Registry.
Annual growth still remains far below the double-digit gains seen in 2022, when the market surged during the post-pandemic property boom.
Robert Gardner, Nationwide’s chief economist, commented that “housing market activity has remained resilient in recent months, despite ongoing affordability challenges”. He also pointed to a “noticeable pickup in total housing transactions” in the latter half of 2024. Still, overall sales for the year were 6% lower than in 2019, the last pre-pandemic year.
Economists believe that part of February’s growth may be driven by buyers keen to avoid higher stamp duty charges set to take effect in April. Ashley Webb from Capital Economics said that the figures indicate the housing market is holding steady despite the weak economy and recent rises in mortgage rates.
The end of temporary stamp duty relief, introduced under Liz Truss’s government, is expected to affect activity. From 1 April, first-time buyers in England and Northern Ireland will pay tax on homes priced above £300,000, down from the current £425,000. The threshold for partial relief will drop from £625,000 to £500,000, and the zero-tax bracket for all buyers will reduce to £125,000 from £250,000.
Gardner noted that these changes are likely to cause short-term fluctuations, saying that they expect transactions to spike in March, followed by a slowdown in the following months.
Interest in property searches remained strong throughout 2024, according to Rightmove, the UK’s leading online property portal. The company reported users spent a combined 16.4 billion minutes on its platform last year – equal to over 31,000 years – a 6% increase compared with 2023.
Reference: The Guardian
