(Alliance News) - UK house price growth surprisingly accelerated in February, according to figures from Nationwide on Tuesday.
Annually, UK house price growth was 6.9% in February, strengthening from the 6.4% rise seen for January. On a monthly basis, prices grew 0.7%, reversing the 0.2% dip seen at the start of the year.
This brought the average house price in the UK to GBP231,068 in February, the highest on record, from GBP229,748 in January.
"This increase is a surprise. It seemed more likely that annual price growth would soften further ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase," said Robert Gardner, Nationwide's chief economist.
The Treasury announced last year that it would temporarily raise the stamp duty threshold from GBP125,000 to GBP500,000 for property sales in England and Northern Ireland.
"While the stamp duty holiday is not due to expire until the end of March, activity and price growth would be expected to weaken well before that, given that the purchase process typically takes several months (note that our house price index is based on data at the mortgage approval stage)," Gardner said.
It could be that the stamp duty holiday is still providing some forward momentum, the economist said, while shifts in housing preferences could also be boosting demand.
As such, all eyes will be on the UK budget on Wednesday. Last week, The Times said it had been told that Chancellor Rishi Sunak – who has been urged not to end the stamp duty holiday – will use his budget to move the deadline to the end of June.
By Lucy Heming; lucyheming@alliancenews.com
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