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Annual UK house prices up 6.9% in February in ‘surprise’ increase

Joanna Bourke
·2-min read
<p>Annual UK house price growth rose 6.9% in February</p> (Chris Ison/PA)

Annual UK house price growth rose 6.9% in February

(Chris Ison/PA)

Average UK house prices rebounded in February, with annual price growth of 6.9% in a “surprise” rise, according to new data.

Nationwide said prices reached a record £231,068 last month. There was annual growth of 6.9% compared to 6.4% in January. There was 0.7% month on month growth, while in Janaury there had been a 0.2% decline.

Housing demand soared in the second half of 2020, boosted by people reassessing housing needs during lockdowns, and the launch of a stamp duty holiday.

However, mortgage lender Nationwide recently said growth slowed for the first time in six months in January, ahead of the stamp duty holiday finishing at the end of March.

Robert Gardner, Nationwide's chief economist, today said the latest increase “is a surprise.”

The mortgage lender had thought it more likely growth would soften ahead of the stamp duty holiday ending.

Gardner said: “While the stamp duty holiday is not due to expire until the end of March, activity and price growth would be expected to weaken well before that, given that the purchase process typically takes several months.”

However, there have been reports Chancellor Rishi Sunak could extend the discount period.

Nationwide’s Gardner said: “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.”

He said: “There is scope for shifting housing preferences to continue to boost activity, especially if there is further policy support in the Budget. Nevertheless, if labour market conditions weaken as most analysts expect, it is likely that the housing market will slow in the months ahead.”

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