Home prices rose last month, according to an influential index, as lower mortgage rates and improved consumer confidence helped stabilize the market.
According to lender Halifax, the average sale price in February was £285,476, an increase of 1.1pc from £281,684 in January.
The annual rate of home price growth increased to 2.1 percent from a 0.2 percent increase in January and a decline of 1.3 percent in December.
Kim Kinnaird, director of Halifax Mortgages, said: “The recent cut in mortgage rates, improving consumer confidence, and continued resilience in the labor market are arguably helping to stabilize prices after the declines in November and December.”
The lender nationwide said last month it suffered its worst drop in home prices in 11 years.
It said annual house prices fell by 1.1pc on an annual basis, which was the market’s worst performance since November 2012.
The property market has come under pressure after mortgage rates rose following the mini-budget last September and the Bank of England raised interest rates to 4pc for ten consecutive months in an effort to tame inflation.
According to Halifax, house prices actually fell on a quarterly basis, but this came after declines in November and December.
Kim Kinnaird, director of Halifax Mortgage, said:
Compared to January, home prices increased by 1.1 percent in the month of February, although overall prices remained flat compared to three months ago.
Recent cuts in mortgage rates, improving consumer confidence, and continued flexibility in the labor market are arguably helping to stabilize prices following declines in November and December.
Nevertheless, with house costs down on a quarterly basis, underlying activity indicates a general downward trend.
In cash terms, house prices are almost £8,500 (-2.9pc) below the August 2022 peak, but remain almost £9,000 above the average prices seen in early 2022 and still above pre-pandemic levels are up, which means most sellers will maintain price gains during the pandemic.
High housing affordability along with median home prices will continue to feel challenging for many buyers.