The average UK house price is now just £1,800 off the peak recorded in June 2022 after it increased by 0.4% in February, marking the fifth monthly rise in a row, according to Halifax.
Property prices grew by 1.7% on an annual basis, compared with 2.3% the previous month, the building society said.
The average UK house price was £291,699 in February, about £1,000 more than the previous month.
Kim Kinnaird, director, Halifax Mortgages, said the figures “continue to suggest a relatively stable start to 2024 and align with other promising signs of increased housing activity, such as mortgage approvals.
“In fact, the average price tag of a home is now only about £1,800 off the peak seen in June 2022.
“Although lower mortgage rates, alongside expectations of Bank of England interest rate cuts this year, should help buyer confidence in the short term, the downward trend on rates is showing signs of fading.”
Kinnaird said that, even with growing wages and inflation falling back, raising a deposit and affording a sizeable mortgage remains challenging, so a slowdown in the housing market “remains a possibility” this year.
London has the highest average house price, £536,996 – up 1.5% on a year earlier last month – while the north-east was the region with the lowest average price, at £171,294, up 4.2%. The south-east and eastern England were the only areas where prices fell, down by 0.6% and 0.8%, respectively.
In Wednesday’s budget, the chancellor, Jeremy Hunt, unveiled some property tax measures, including a cut in the higher rate of capital gains tax on residential properties from 28% to 24% from April 2024.
Budget documents said the moves would encourage landlords and second homeowners to sell their properties, making more available for a variety of buyers – including those hoping to get on the housing ladder.
Nicky Stevenson, managing director at estate agent group Fine & Country, said: “It will be interesting to see whether the chancellor’s capital gains tax cut announcement in the budget encourages teetering landlords to sell their properties.
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“A rush of new listings would inject more energy into the housing market and may reignite demand from first-time buyers who have been struggling to afford a home in this high interest rate environment.”
Amy Reynolds, head of sales at London-based estate agent Antony Roberts, said: “The market continues to pick up momentum after a relatively quiet 2023, with a flow of committed buyers and a strong pipeline of serious applicants, which bodes well for a busy spring market.”
Sam Mitchell, chief executive of Purplebricks, said: “The housing market has been on the path to recovery in recent months, helped along by consecutive holds on interest rates from the Bank of England and banks actively competing on mortgage rates, but this recovery remains fragile.”
