UK House Prices Surged in February on Lower Mortgage Rates

According to recent industry figures, February witnessed a resurgence in house prices amid a backdrop of declining mortgage rates. The latest data from Rightmove's house price index reveals that the average price for new sellers increased by 0.9% over the previous month, marking a slight improvement of 0.1% compared to the same period last year.

This uptick represents the first annual increase after a six-month streak of declining prices. January saw a monthly increase of 1.3% in prices, although they were down by 0.7% annually. The current average listing price has reached £362,839.

The initial six weeks of 2024 saw a significant 16% rise in agreed sales compared to the same timeframe in the previous year, accompanied by a 7% increase in both new listings and inquiries from potential buyers.

Tim Bannister, Rightmove's director of property science, commented: “The start of the year saw early-bird buyers making the most of a record level of new property listings, with many others now following suit, encouraged by the market conditions of 2024. After the fluctuations of late 2022 and 2023, mortgage rates have significantly reduced and are now stabilising, contributing to a growing momentum for moving this year.”

However, Rightmove also observed a heightened price sensitivity in the market, with less expensive homes selling more swiftly than their pricier counterparts. Currently, it takes over two weeks longer to secure a buyer than at the same point last year, marking the slowest pace since 2015 if one discounts the pandemic period.

The Bank of England has raised borrowing costs 14 times in an effort to curb rising inflation, bringing the rate to 5.25%. Despite this, rates have remained unchanged since August, with many experts predicting the next adjustment will be a reduction.

Following the government's controversial mini-budget in 2022, mortgage rates spiked but have begun to moderate in recent months, signalling a potential easing for prospective homebuyers.