LONDON (dpa-AFX) - UK house prices increased for the fifth consecutive month in February vindicating the view that the property market is on a recovery path.
House prices advanced 0.4 percent from January, mortgage lender Halifax reported Thursday.
However, the pace of growth eased sharply from 1.2 percent in January, and was also weaker than economists' forecast for an 0.8 percent increase.
On a yearly basis, property prices increased 1.7 percent following a 2.3 percent rise. A typical house now cost GBP 291,699, around GBP 1,000 more than January.
These figures continue to suggest a relatively stable start to 2024 and align with other promising signs of increased housing activity, such as mortgage approvals, Halifax Mortgages Director Kim Kinnaird said.
Lower mortgage rates, alongside expectations of Bank of England interest rate cuts this year, should boost buyer confidence in the short-term but the downward trend on rates is showing signs of fading, Kinnaird added.
'Even with growing wages and inflation falling back, raising a deposit and affording a sizeable mortgage remains challenging, especially for those looking to join the property ladder, so it remains a possibility that there could be a slowdown in the housing market this year,' said Kinnaird.
The Bank of England had maintained its interest rate for the fourth consecutive time last month and kept the door open for the rate cut this year. At 5.25 percent, the bank rate is the highest in 15 years.
Mortgage approvals data last week showed that the impact of higher interest rates is fading in the housing market. Approvals rose to a 15-month high of 55,200 in January.
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