UK house prices rebounded in February, rising on a monthly, annual and quarterly basis for the first time since October, according to the latest Halifax house price index.
House prices rose 5.9% in February, reversing the 2.9% fall the previous month.
In the three months to February they were 2.8% higher than in the same three months a year earlier – up from the 0.8% annual growth rate recorded in January
The annual rate of house price growth went up to 2.8%, from the 0.8% growth recorded in January.
The average UK house price was £236,800, up from £223,691 in January.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics warns that while a Brexit deal could help boost the market temporarily, there could be an interest rate rise.
He says: “The support to house prices from the combination of faster growth in nominal wages and extremely low unemployment is being offset, for now, by anxiety about Brexit. The housing market likely will revive for a short period if, as we still expect, MPs sign off a Brexit deal by the summer.
“But a Brexit deal also will give the green light to the [Bank of England] Monetary Policy Committee to push through further increases in bank rate. With loan-to-income ratios at a record high, even modest increases in mortgage rates will greatly dampen house price growth. As a result, we still expect the official measure of house prices to rise by just 1.5% over the course of 2019.”
January saw 101,170 home sales, close to the five-year average of 101,291 - the fifth consecutive month over 100,000 homes have been sold. January home sales were 2% above the previous 12-month average.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says that while he welcomes the numbers, shortage of supply had played a significant factor in the uplift.
He says: “The reasons behind it are certainly not just to do with Brexit as we consistently hear on the doorsteps - affordability and tough lending criteria as other factors. Local factors are also highly relevant and activity varies quite a bit from area to area.
“Looking forward, we expect to see more of the same and hopefully a more balanced market, particularly if negotiations on EU withdrawal begin to make some progress.”
Russell Galley, managing director, Halifax, says that while annual house price growth is within expectations, it is fairly subdued compared to 2015 and 2016 when the average growth rate was 8.3%.
He says: “The shortage of houses for sale will certainly be playing a role in supporting prices.
“People are still facing challenges in raising a deposit which means we continue to expect subdued price growth for the time being.
"However, the number of sales in January was right on the five-year average and, at over 100,000 for the fifth consecutive month, the overall resilience of the market is still evident.”
The Halifax house price index tends to be more volatile than other measures.
According to the Nationwide House Price Index, annual house price growth edged up by 0.4% in February - up from 0.1% the previous month.