Nationwide reports that house price growth has returned to double digits, but underlying demand is weakening, with higher interest rates and stretched affordability causing demand to wane, yet supply constraints and buy-to-let interest will support prices in the short term.
The average house price has increased from £173,225 in January to £174,706 in February, a month on month increase of 0.7% that brings the annual price increase to 10.2%.
Commenting on the figures Fionnuala Earley, Nationwide's Chief Economist, said: "The Bank of England spared homeowners a second consecutive rate rise in February, but its latest forecasts suggest that one more rise could still be on the cards. While the three recent rate rises now seem to be starting to take their toll on the market, not all indicators are cooling just yet. Buyer interest and mortgage demand are waning, but the supply of properties coming onto the market remains low. This lack of supply will mean that house price inflation will remain firm for a while longer, before gradually easing. Prices rose by a steady 0.7% in February, pushing the annual rate of house price growth back into double digits to 10.2%. The price of a typical house now stands at £174,706. This is more than £16,000 higher than this time last year and the equivalent of a rise of more than £40 per day."
