Nationwide HPI – House price growth remains solid in February
- Annual rate of house price growth remained broadly stable in February at 3.9%, compared with 4.1% in January
- House prices up 0.4% month on month
- Recovery in housing market transactions in 2024
| Headlines | Feb-25 | Jan-25 |
|---|---|---|
| Monthly Index* | 543.7 | 541.6 |
| Monthly Change* | 0.4% | 0.1% |
| Annual Change | 3.9% | 4.1% |
| Average Price
(not seasonally adjusted) |
£270,493 | £268,213 |
* Seasonally adjusted figure (note that monthly % changes are revised when seasonal adjustment factors are re-estimated)
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:
“The price of a typical UK home rose by 3.9% year on year in February, similar to the annual pace of growth seen in January. House prices increased by 0.4% month on month, after taking account of seasonal effects – the sixth consecutive monthly gain.
“Housing market activity has also remained resilient in recent months, despite ongoing affordability challenges. Indeed, the second half of 2024 saw a noticeable pick up in total housing transactions, which were up 14% compared with the same period in 2023.
However, taking 2024 as a whole, transactions were still modestly (6%) lower than the levels prevailing before the pandemic struck in 2019.
“In terms of the pattern of transactions, it is notable that first-time buyer activity continued to recover, with mortgage completions in 2024 just 5% below 2019 levels. This represents a solid performance, given the interest rate environment – for example, five-year fixed mortgage rates are currently around 4.4% (for borrowers with a 25% deposit) compared to c2% in 2019.
“Cash transactions remained particularly robust, with activity 2% above pre-pandemic levels.
“The last 12 months have seen a gradual increase in the number of buy to let purchases involving a mortgage, with rental increases and an easing in buy to let mortgage rates improving the ability to raise finance. Nonetheless, activity remains quite subdued compared to historic levels.
“However, it is important to note that some cash purchases are also undertaken by landlords and that activity in this space appears to have remained more buoyant. However, higher transaction costs, as a result of recent and upcoming stamp duty changes and uncertainty relating to the regulatory environment, also appear to be having a cooling effect on this segment of the market.
“Looking ahead, the changes to stamp duty at the start of April are likely to generate volatility in transactions in the near term, as buyers bring forward their purchases to avoid the additional tax. This will likely lead to a jump in transactions in March, and a corresponding period of weakness in the following months, as occurred in the wake of previous stamp duty changes.”
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