UK house prices increases remain steady, says Nationwide

UK house prices increased by a steady 0.3% month-on-month in February, the same rate as the month before but below the consensus forecast of 0.4%, according to data from the Nationwide building society.

Nationwide also noted a slight acceleration in annual house price growth to 4.8% from 4.4% the month before.

“The number of mortgages approved for house purchase increased sharply in January to almost 75,000, up from around 71,000 approvals in December and the highest number since January 2014," said Robert Gardner, Nationwide's chief economist.

“However, much of the increase is likely to be related to the impending increase in Stamp Duty on second homes which is due to take effect in April 2016. This is likely to have brought forward a significant number of purchases, which in turn will probably result in a fall back in approvals during the spring/summer."

But Sam Tombs at Pantheon Macroeconomics said Nationwide’s measure of house prices underplays the extent to which the housing market is heating up again.

"The latest growth rates of all the other main measures of house prices have been significantly stronger over the last six months. Nationwide’s index is based on its mortgage offers, so its weakness may reflect sampling issues. We still expect the strengthening labour market, falling mortgage rates and a dearth of homes for sale to result in punchy house price increases this year."