House prices increased last month, according to an influential index, as reductions in mortgage rates and improving consumer confidence helped stabilise the market.
The average sale price stood at £285,476 in February, a rise of 1.1pc from £281,684 in January, according to lender Halifax.
The annual rate of house price growth has sped up to 2.1pc, up from a rise of 0.2pc in January and a fall of 1.3pc in December.
Kim Kinnaird, director, Halifax Mortgages, said: “Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December.”
It comes after lender Nationwide said house prices suffered their worst slump in 11 years last month.
It said annual house prices declined on an annual basis by 1.1pc, which was the market’s worst performance since November 2012.
The property market has come under pressure after a surge in mortgage rates following the mini-Budget last September and the Bank of England raising interest rates for ten consecutive months to 4pc in an effort to bring down inflation.
House prices actually fell on a quarterly basis, according to the Halifax, but this came after falls in November and December.
Kim Kinnaird, director, Halifax Mortgages, said:
When comparing to January, there was a 1.1pc increase in house prices through the month of February, although overall prices are flat compared to three months ago.
Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December.
Still, with the cost of a home down on a quarterly basis, the underlying activity continues to indicate a general downward trend.
In cash terms, house prices are down around £8,500 (-2.9pc) on the August 2022 peak but remain almost £9,000 above the average prices seen at the start of 2022 and are still above pre-pandemic levels, meaning most sellers will retain price gains made during the pandemic.
With average house prices remaining high housing affordability will continue to feel challenging for many buyers.
