February house prices increased by almost 2% year-on-year, according to the Halifax house price index

House prices in the UK rose for the fifth month in a row, increasing by 0.4% month-on-month or £1,091, bringing them close to the property price peak observed in 2022.

House sales

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House prices have increased by 0.4% compared to last month according to the latest house price index from Halifax

The average cost of a home in the UK now stands at £291,699, only around £1,800 less than the peak in June 2022.

According to the latest Halifax house price index, house prices have risen by 1.7% compared to February last year, which is slightly lower than the 2.3% year-on-year increase seen in January.

Kim Kinnaird, director at Halifax Mortgages, has said that the figures indicate “a relatively stable start to 2024 and align with other promising signs of increased housing activity, such as mortgage approvals”.

House prices in Northern Ireland have seen the highest increase on an annual basis, with the cost of the average home up by 5% or £9,359 compared to February 2023.

The North-west has seen house prices rise by 4.4% on an annual basis, bringing the average price to £232,128.

The North-east and Wales have also recorded strong increases over the last year, with growth rates of +4.2% and +4.1%, respectively. London house prices increased by 1.5% in February, the first annual growth since January 2023.

However, the East of England saw a decrease in its house prices of 0.8% last month, equivalent to a drop of £2,794.

Kinnaird added: “While it is encouraging that we’ve seen growth in recent months, what happens next remains uncertain. Although lower mortgage rates, alongside expectations of Bank of England interest rate cuts this year, should help buyer confidence in the short term, the downward trend on rates is showing signs of fading. “Even with growing wages and inflation falling back, raising a deposit and affording a sizeable mortgage remains challenging, especially for those looking to join the property ladder, so it remains a possibility that there could be a slowdown in the housing market this year.”

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Sam Mitchell,chief executive of Purplebricks, said: “The housing market has been on the path to recovery in recent months, helped along by consecutive holds on interest rates from the Bank of England and banks actively competing on mortgage rates. But this recovery remains fragile, and the Government had a prime opportunity during yesterday’s Spring Budget to stabilise this upward trajectory. Regrettably, this was an opportunity missed. 

”The lack of a concrete decision from the chancellor on stamp duty cuts has a very real potential to derail this newfound progress. This may wrongly and unnecessarily delay buying and selling decisions, as people are left holding out for a change that might come later in the year.”

HMRC monthly property transaction data showed that seasonally adjusted house sales in January 2024 increased by 1.9% compared to December.

The latest Bank of England figures show the number of mortgages for house purchases increased by 7.2% in January 2024, to 55,227.