British house prices rose by a stronger than expected 0.4% in February compared with January, according to data published by mortgage lender Nationwide today, adding to signs of buyers rushing to beat the expiry of a tax break next month.
The increase was stronger than all forecasts in a Reuters poll of economists which had pointed to a 0.2% monthly rise after January’s increase of 0.1%.
Several measures of Britain’s housing market have shown a recovery in demand, helped by falling borrowing costs and also by buyers moving quickly before a tax incentive on the purchase on some homes expires at the end of March.
Robert Gardner, Nationwide’s chief economist, said the stamp duty changes were likely to generate near-term volatility in transactions as buyers brought forward their purchases.
“This will likely lead to a jump in transactions in March, and a corresponding period of weakness in the following months, as occurred in the wake of previous stamp duty changes,” Gardner said.
Property website Rightmove said earlier this month that a run-up in asking prices for newly listed homes was losing steam ahead of the tax change.
A Reuters poll published earlier this week showed British home prices were expected to rise by 3.5% this year – faster than previously forecast – and by 4% in 2026, helped by further reductions in interest rates by the Bank of England.
Nationwide said house prices were up by 3.9% compared with February last year, slightly slower than January’s 4.1% rise.
