For the first time in over a year, house prices have started to grow again, nearing their peak levels, as reported by a lending institution, coinciding with a sharp rise in mortgage approvals.
The Nationwide house price index revealed a 1.2% increase in property values over the 12 months leading up to February. There was a 0.7% uptick in prices from January to February, bringing the average house value to £260,420.
This resurgence aligns with data from the Bank of England, indicating that January saw the highest number of mortgage approvals in nearly a year and a half, spurred by lower borrowing costs attracting more participants into the real estate market.
In the month under review, the Bank of England reported that over 55,000 mortgages were sanctioned for buying homes, marking the highest number since October 2022.
This surge came just before the housing market experienced a sharp downturn following the financial instability triggered by Liz Truss’s mini-budget.
Robert Gardner, Nationwide’s chief economist, noted, “Currently, house prices are about 3% lower than the record highs seen in the summer of 2022, once seasonal adjustments are considered. It seems that the recent decrease in borrowing costs has led to a revival in the housing market.”
