House prices show small increase

House prices increased by 0.3% month on month in February as the market held steady moving into early spring.

The report from Halifax was released as some economists warned that the impact of coronavirus could weigh on consumer confidence in the coming months.

Across the UK, the average house price in February was £240,677, Halifax said.

Property values were 2.8% higher than a year earlier, compared with year-on-year growth of 4.1% recorded in January.

Russell Galley, managing director, Halifax, said: "The UK housing market has remained steady heading into early spring, with house prices increasing by 0.3% in February and up 2.8% on the previous year.

"Much like we saw in January, the increases seen in February reflect the continued improvement of key market indicators.

"The sustained level of buyer and seller activity is strong compared to recent years, with positive employment conditions and a competitive mortgage market continuing to support demand.

"Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continue to exert pressure on the economy and we wait to see how these will affect housing market sentiment later in the year."

Howard Archer, chief economic adviser, EY Item Club said: "While it should be borne in mind that Halifax has tended to be at the top end of house prices measures, most of them have recently shown a firming in prices.

"We had been expecting house prices to rise 3% over 2020 following the marked pick-up in activity at the start of the year, but it looks highly likely that the coronavirus outbreak will have some dampening effect as it weighs down on the economy and likely hurts consumer confidence.

"Consequently, we are cutting our forecast to 2.5% and it may well need to come down further still."

Tomer Aboody, director of property lender MT Finance, said Brexit uncertainty and stock market fluctuations due to coronavirus could cause particular issues for the housing market.

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors said: "Of course, it is too early to say if the recent improvement in activity will be compromised by a fall in confidence.

"On the ground, the market remains price sensitive with still too few listings but we are not finding properties being withdrawn."

Published: 06/03/2020 by Radio NewsHub