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Annual house price growth rose to 6.9% in February

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02/03/2021
The rise in prices caught many experts by surprise, as the housing market remains resolutely resilient
Annual house price growth rose to 6.9% in February

Average UK house prices reached their highest ever level in February, hitting £231,061, according to Nationwide.

This was 6.9% higher than the previous February and 0.7% higher than in January this year, more than reversing that month’s small dip.

Robert Gardner, Nationwide’s chief economist, said: “This increase is a surprise. It seemed more likely that annual price growth would soften further ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase.

“It may be that the stamp duty holiday is still providing some forward momentum, especially given the paucity of properties on the market at present. Shifts in housing preferences may also be providing a more significant boost to demand, despite the uncertain economic outlook.

“Many peoples’ housing needs have changed as a direct result of the pandemic, with many opting to move to less densely populated locations or property types, despite the sharp economic slowdown and the uncertain outlook.

“As a result, the outlook for the housing market is unusually uncertain.

George Franks, co-founder of London-based estate agents, Radstock Property, agreed that people’s preferences are changing.

“February’s rebound in prices is a result of cheap money, weak supply and the Zoomification of work”, he said.

“We all know a gigantic fiscal squeeze is coming but for now the success of the vaccination programme, coupled with exceptionally low borrowing rates, has created a real feel-good factor around property.

“The Zoomification of work is a key driver of activity at present. In recent months, it has become clearer that the remote working trend will not suddenly end once the pandemic is over.

“It’s no exaggeration to say we are witnessing a fundamental recalibration in the property market.”

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