The average price of a house rose to £236,800 in the three months to February, up 2.8 per cent compared to the same period one year prior. This is a marked contrast with the 3 per cent month-on-month decline recorded in January.
Russell Galley, managing director at Halifax, said: “The shortage of houses for sale will certainly be playing a role in supporting prices.
“People are still facing challenges in raising a deposit which means we continue to expect subdued price growth for the time being. However, the number of sales in January was right on the five year average and, at over 100,000 for the fifth consecutive month, the overall resilience of the market is still evident.”
Lucy Pendleton, founder of estate agents James Pendleton, said: “This market is rattling around like a ricocheting bullet. It’s an incredibly unusual shift, even for monthly prices which are known to be more volatile.
“At first glance this monthly surge could be a bout of pre-Brexit confidence but nothing has changed. We have as much certainty over Britain’s exit from the EU as we did a year ago.
“The more likely answer is that in key areas low supply is squeezing those buyers who have a need, rather than just a desire, to move and just can’t put it off any longer.”
Meanwhile, Samuel Tombs at Pantheon Macroeconomics said the volatility shown in the latest figures provoked “little confidence in Halifax’s index as a reliable indicator of the housing market”.
“Its extreme volatility… undermines its validity,” he added. “Like others, the index is seasonally adjusted, but it uses an outdated methodology which potentially is contributing to its excessive volatility. All other indicators suggest that house prices essentially are on a flat trend.”
Mr Tombs said: “The support to house prices from the combination of faster growth in nominal wages and extremely low unemployment is being offset, for now, by anxiety about Brexit.
“The housing market likely will revive for a short period if, as we still expect, MPs sign off a Brexit deal by the summer. But a Brexit deal also will give the green light to the MPC to push through further increases in bank rate.
“With loan-to-income ratios at a record high, even modest increases in mortgage rates will greatly dampen house price growth. As a result, we still expect the official measure of house prices to rise by just 1.5 per cent over the course of 2019.”
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