House prices flat but ‘only a matter of time’ before market acceleration
House prices were unchanged in February, but market experts have said prices will rise later in the year as mortgage rates fall.
The average UK house price remained at £268,000 in February, flat month on month but up 5.4 per cent year on year, according to the ONS.
Growth was driven by higher prices in the north of England, with London values up just 1.7 per cent year on year.
“Whilst house prices remained unchanged in February, we’ve continued to see positive growth on an annual basis and this is a far better measure of the ongoing improvements seen to the health of the UK property market,” CEO of Yopa, Verona Frankish, said.
“We also saw the Bank of England implement a second base rate reduction in February and so it’s only a matter of time before this boost to buyer market sentiment starts to accelerate the level of house price growth being seen across the market,” Frankish added.
Commentators pointed to the drop in inflation last month as a positive sign for mortgage rates.
“The dip in inflation to 2.6 per cent is encouraging news as far as future interest rate movements are concerned, and if this downwards trend continues, it will make it easier for the Bank of England to cut rates again sooner rather than later,” Mark Harris, chief executive of mortgage broker SPF Private Clients, said.
“Another rate reduction would help boost affordability, and would be particularly timely now that the stamp duty concession has ended,” Harris added.
CEO of Octane Capital, Jonathan Samuels, said: “Since the Bank of England first decided to cut interest rates in August of last year, we’ve seen mortgage rates trending downwards and there’s no doubt that these improvements to mortgage affordability are helping to positively stimulate the UK property market.”
The mortgage landscape is only expected to improve as the year progresses with further cuts to interest rates on the cards and these cuts could start to come thick and fast should Trump’s insistence on global economic instability start to drive up inflation.”