Business

UK house prices accelerated in February, says the Nationwide

Houses Image copyright PA

UK house prices accelerated in February with property values rising by 4.5% in a year, the Nationwide has said.

The building society said that house prices were up by 0.6% compared with the previous month, bringing the cost of the average home to £205,846.

Both the monthly and annual rise are greater than in January, but the Nationwide does not expect house prices to rocket.

It said the outlook for the market was uncertain.

It is predicting a 2% rise in UK house prices over the course of the year.

"We, along with most other forecasters, expect the UK economy to slow through 2017 as heightened uncertainty weighs on business investment and hiring," said Robert Gardner, Nationwide's chief economist.

"Consumer spending, a key engine of growth in recent quarters, is also likely to be impacted by rising inflation in the months ahead as a result of the weaker pound.

"Nevertheless, in our view a small rise in house prices of around 2% is more likely than a decline over the course of 2017, since low borrowing costs and the dearth of homes on the market will continue to support prices."

Jonathan Hopper, managing director of Garrington Property Finders, said: "It is fast becoming less a battle of wills than a battle of nerves - the uneasy standoff between cautious buyers and sellers who know they have less competition than usual."

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