UK house prices rise at fastest rate for 18 months

UK house prices have risen at their fastest rate since mid-2018, after December’s decisive election result triggered a rebound in demand.

The average price of a home climbed 2.3% year on year to £216,092 in February, Nationwide said, the strongest growth rate in 18 months.

The news came as the estate agent Foxtons reported an £8.8m loss last year, down sharply from a loss of more than £17m the previous year. It expects sales to improve during 2020.

Nationwide’s chief economist, Robert Gardner, said the housing market had gained momentum in recent months. “While overall economic growth ground to a halt in the final three months of 2019, labour market conditions remained buoyant and borrowing costs low. The decisive election outcome may have provided a boost to buyer sentiment,” he said.

However, the outlook for house prices will depend on the UK’s economic performance over the coming months, which could take a hit depending on the outcome of Brexit trade talks and the impact of the coronavirus outbreak. “There are still significant uncertainties that threaten to exert a drag on the economy in the coming quarters,” Gardner warned.

Nevertheless, Nationwide expects the UK economy to continue expanding at a modest pace, with house prices staying broadly flat. If the forecast proves correct, the fortunes of estate agents could improve.

Last year proved challenging for Foxtons: sales revenues fell by 10% to £32.6m as house prices and the number of home sales declined.

The chief executive, Nic Budden, said Foxtons sales pipeline – transactions not yet completed – was stronger than a year earlier. “Looking forward, with the uncertainty of the general election removed, early signs are that the sales market may improve,” he said.

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