House prices rise for the sixth month in a row: Will it continue?

According to Nationwide, the average UK property now worth £270,493 after rising by 3.9% over the past year.

In January, house prices grew by 0.1%, but in February, they grew by 0.4%.

According to Nationwide, house prices have increased for six consecutive months.

Nationwide's chief economist, Robert Gardner, said: “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.”

There have been reports from lenders recently showing first-time buyer activity has increased, and Nationwide’s data endorses this.

It said mortgage completions by those taking their first step onto the property ladder in 2024 were just 5% below 2019 levels.

Gardner said: “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.”

He added: “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.”

Due to the lowering of stamp duty thresholds on 1 April, more buyers will have to pay tax when buying a home. Those moving into higher-priced areas and first-time buyers will be the most affected.

Experts believe that the current house price positive trend may be short-lived.

Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the wealth manager, said: “While property prices are expected to remain resilient in the first quarter, partly a reflection of base rate cuts and the stamp duty deadline, it will be interesting to see whether that momentum continues beyond April when the property tax thresholds revert back to their previous, lower levels.

“Affordability levels may be improving, albeit very slightly, but they remain severely stretched by historical standards.

“Mix that in with property tax increases, rising living costs from April when household bills jump up once again, job uncertainty and the potential for wage growth to slow and some sellers may be compelled to adjust asking prices downwards to secure a sale.”